French Insurance Giant AXA to Halt Insuring, Investing in Tar Sands and CoalTweet
PARIS, France – In a striking sign of the financial industry’s growing concerns over the climate and business risks of fossil fuels, French insurance giant AXA announced today that it will cease insuring the tar sands sector and new coal projects, and will divest over €3 billion (US$3.5B) from tar sands and coal companies. The announcement was made by AXA CEO Thomas Buberl in a speech at today’s “One Planet” climate summit convened by President Macron.
AXA is the world’s third largest insurance company in terms of assets and the second largest financial services company in terms of revenue. It is the parent company of New York based Equitable Life Insurance Co.
AXA will no longer insure tar sands production or transport. It will divest its more than €700 million (US$823M) in holdings in 13 companies with 30% or more of their proven and probable reserves in tar sands. AXA will also divest from TransCanada, Kinder Morgan and Enbridge, the companies that are currently developing three major tar sands pipelines —the Keystone XL, Trans Mountain, and Line 3 pipelines, respectively.
Tar sands oil is one of the dirtiest fuels on the planet. Environmental and Indigenous rights groups in Canada, the US and Europe are urging financial institutions to stop supporting tar sands because of its climate and local environmental impacts, and the failure of tar sands companies to obtain the Free, Prior and Informed consent of many affected First Nations in Canada, and Native Americans.
Friends of the Earth France, with support from Rainforest Action Network and many other groups in Europe and North America, have engaged with AXA on the technicalities of the tar sands industry and helped them reach an informed decision.
Lucie Pinson of Friends of the Earth France said: “In doing the right thing on tar sands, and taking the pipeline business as a part of the tar sands sector, AXA is sending a strong signal to other insurers and investors that the era of extreme fossil fuels is drawing to a close. While the divestment of €700 million from tar sands companies is highly significant, the withdrawal of insurance services should also send a shockwave through the sector. An uninsurable business cannot survive.”
This is the second major blow to tar sands companies in just the past two months. In October, France’s largest bank, BNP Paribas, announced that it would stop funding tar sands projects and companies (as well as projects and companies related to Arctic oil, fracking, and Liquified Natural Gas terminals supplied by fracked gas).
AXA will also stop providing construction insurance for new coal plants and new coal mines, and restrict coverage for existing coal plants. The company will divest a total of €2.4 billion (US$2.8B) from 113 of the world’s top 120 coal developers. The coal divestment criteria are: power companies which generate over 30% of their electricity from coal; companies with plans for new coal power plants totaling over 3,000 megawatts; and mining companies with either a coal share of revenues over 30%, or with an annual coal production higher than 20 million tons.
Patrick McCully, Climate and Energy Program Director for Rainforest Action Network said: “It is particularly encouraging to see investors acknowledging that support for the Paris Climate Agreement means kicking companies out of their portfolios if those companies continue planning new fossil fuel projects which would destroy our chances of meeting the Paris goals.
“JPMorgan Chase, the number one funder of tar sands on Wall Street, should take notice of AXA’s move and announce its own plans to stop supporting companies building tar sands pipelines and other infrastructure that facilitates expansion of the dirtiest fuels.”
Over the past week, major French banks Société Générale, Crédit Agricole, and Natixis, all tightened their lending restriction on tar sands. FFA, the French Insurance Federation, also announced that its members intend to stop investing in coal companies that do not halt their plans for building new coal power plants and mines.
Rainforest Action Network (RAN)
Blair Fitzgibbon, Blair@soundspeedpr.com, +1 (202) 5036141