Insurers' LNG support at odds with their climate ambition, report says
(Bloomberg) –The underwriting of liquefied natural gas capacity in the US by major global insurers is at odds with their climate ambition, according to a report from activist groups including Public Citizen and Rainforest Action Network.
Chubb, American International Group and The Hartford Financial Services Group are among underwriters listed on certificates of insurance for seven US LNG export facilities that include terminals in operation and under construction, according to the researchers, who obtained the information through 50 Freedom of Information Act requests. In at least one case, the policy had expired.
The report highlights an irony in the insurance industry: While some underwriters are pulling back from traditional coverage areas as climate change exacerbates wildfires, storms and flooding, they are also continuing to support new fossil-fuel projects expected to operate for decades.
Although LNG generates about half the carbon dioxide as coal when combusted, the climate benefits of coal-to-gas switching often hinges on the amount of methane that leaks across natural gas and LNG supply chains. The short-term climate impact from the world’s existing LNG supply chains, including final combustion of the fuel, is about 1.5 billion metric tons a year of carbon dioxide equivalent, according to a 2022 IEA model. That exceeds the annual CO2 emissions of Japan, the world’s fifth biggest polluter.
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Zurich-based Chubb says on its website that its climate goals are aligned with the “two-degree Celsius target outlined in the Paris Climate Agreement” as well as quantitatively supported science-based standards methodology from the United Nations. The company or its subsidiaries are involved in four of the US LNG export projects, according to the report. Chubb declined to comment.
AIG says on its website it’s committed to reach net zero greenhouse gas emissions across its underwriting and investments portfolio by 2050 or sooner and that its committed to the goals of the Paris Agreement. The Hartford plans to achieve net zero emissions for its full range of businesses and operations by mid-century, according to its website. AIG declined to comment and The Hartford didn’t immediately respond to a request for comment.
To contact the author of this story:
Aaron Clark in Tokyo at aclark27@bloomberg.net
