Insurance Giant Adopts Policy on Conservation Areas and Methane Emissions
March 22, 2023 – Today, Chubb (NYSE: CB) announced a new suite of policies to restrict underwriting oil and gas extraction based on conservation and emissions criteria. According to its press release, Chubb will not insure oil and gas extraction projects that are located in specific protected areas or do not have evidence-based plans to manage methane emissions. This marks the first policy from a U.S. insurer that applies to conventional oil and gas underwriting and follows years of campaigning for Chubb to heed the warnings of impacted communities and climate scientists.
Insure Our Future and partners welcome this as a notable first step in aligning Chubb’s oil and gas business with environmental and human rights imperatives, but point to major gaps in the framework that will allow it to continue insuring the expansion of many new oil and gas fields, oil and gas pipelines and other midstream infrastructure, including in protected areas, and projects that have not obtained the consent of impacted Indigenous communities.
“These policies represent a major step forward for people and planet, as no insurer should be enabling new or existing methane-intensive oil and gas fields or extraction on protected lands. However, for Chubb to fully align with a safe climate pathway and a world in which ecosystems and human rights are protected, it must stop underwriting the expansion of fossil fuels everywhere. As the IPCC report released this week makes clear, our window for action to secure a liveable and sustainable future for all is rapidly closing. Chubb’s continued support for new oil and gas infrastructure does not align with the scientific consensus that we cannot expand oil and gas production to stay within 1.5ºC,” said Elana Sulakshana, Senior Energy Finance Campaigner with Rainforest Action Network.
Chubb is a top fossil fuel insurer, with an estimated 500-800 million USD in annual premiums from the industry according to market intelligence firm Insuramore. Research from Insure Our Future has linked the company to seismic exploration in the Arctic National Wildlife Refuge in Alaska and expansion of offshore oil drilling in Brazil, including in protected marine zones, among other projects.
In recent years, Chubb has come under increasing fire for its role in supporting fossil fuel expansion, facing pressure from Indigenous Peoples, climate activists in NYC and beyond, and shareholders to end insurance coverage for new oil and gas projects and respect Indigenous rights. In fall 2022, 50 people rallied at CEO Greenberg’s Manhattan home and urged him to take action for the climate and communities.
Today’s announcement marks the beginning of a new chapter in the campaign to curb U.S. insurers’ underwriting of oil and gas. As the first U.S. insurance company to limit insuring oil and gas drilling that is not tar sands or Arctic-specific, Chubb joins over 12 peers that have committed to end or restrict insurance for new oil and gas fields, including Allianz, AXA, and Munich Re. This follows on Chubb’s leadership as the first U.S. insurer to rule out underwriting some coal projects and companies in 2019.
“With Chubb’s announcement, all eyes are on major fossil fuel insurers AIG and Liberty Mutual to urgently step up their climate game,” said Hannah Saggau, insurance campaigner with Public Citizen’s climate team. “As more global insurance companies restrict support for oil and gas, it becomes increasingly unacceptable for their peers to continue backing new fossil fuel projects. AIG and Liberty Mutual must stop propping up deadly oil and gas expansion and respect human rights.”
The policy comes in the context of growing pressure on insurers from certain fringe right-wing actors to turn a blind eye to mounting climate risks, with recent bills introduced in Texas that seek to kneecap the consideration of such risks. “With this policy, Chubb and its CEO Evan Greenberg have taken a welcome first step to defend climate risk management against barely-camouflaged climate denial attacks,” said Risalat Khan, a senior strategist with Insure Our Future. “More insurers must take a stand for science-based climate risk management, if they do not want their entire business models to be in the crosshairs.”
Moving forward, communities will continue to ask questions of Chubb to understand the scope of the policy and push for existing loopholes to be closed. For example, in recent years, Chubb has faced scrutiny for its presence in the Arctic region. The application of this policy to the Arctic region is not yet clear, and according to the statement, those standards may not be developed until the end of 2023.
“Chubb is recognizing the importance of protected land in this policy, but there are so many sacred ecosystems that do not have protected area designations facing threats from oil and gas drilling. For example, it’s unclear if this policy would be applicable to the recently-approved Willow project on the North Slope of Alaska, which poses major risks to Iñupiaq communities and the land, water, and wildlife,” said Liz Marin, Missing and Surviving Indigenous Peoples Director (Tlingit, Alaskan Native) with Seeding Sovereignty.
Furthermore, the policy does not apply to oil and gas pipelines, or liquefied natural gas (LNG) export infrastructure projects that are enabling increased extraction of oil and gas and have their own issues with methane emissions.
“Historically overburdened communities like mine struggle daily with chronic health issues while fossil fuel corporations continue to exploit us for profit. By not restricting insurance coverage for the expansion of LNG facilities and pipelines, like Port Arthur LNG proposed in my backyard, Chubb’s policy falls short of real environmental and climate justice measures,” said John Beard, Jr., Founder and CEO of the Port Arthur, TX Community Action Network. “Chubb cannot ignore that at every step in the process from extraction to transport to storage, LNG is poisoning our air, water and soil and emitting methane gas. We say enough is enough. We will fight back; we refuse to be sacrificed!”
“Given that this new policy only applies to oil and gas extraction, Chubb is still at risk of insuring the East African Crude Oil Pipeline (EACOP), a carbon bomb in Uganda and Tanzania, which will be crossing over nearly 2,000 square kilometers of protected wildlife habitats. Chubb must put our human rights, health, and environment above the mercy of fossil fuels and rule out EACOP, along with all destructive new oil and gas pipelines. The 2023 IPCC report clearly warns that we have to reduce global emissions by 60% by 2035 if we are to limit warming to 1.5ºC. Chubb should avoid acting as a deterrent to climate justice,” said Hillary Innocent Taylor Seguya, Ugandan climate justice activist and graduate student of international relations at Harvard University.
(This press release will be updated as more partners react to the announcement)