In April 2024, Chubb released a new policy to expand their minimal restrictions on insuring oil and gas. Chubb continues to feel campaign pressure to address their reputation risk on oil and gas and human rights, and is taking small steps towards our campaign demand: stop insuring methane.
While even their newest policies fall short, they indicate critical forward motion and that pressure and people power is working.
What does the new policy do?
Chubb is expanding last year’s upstream (i.e extraction such as fracking) oil and gas policy to now include midstream projects (i.e. pipelines, methane export terminals).
According to these updated standards, Chubb will 1) not insure new greenfield, midstream oil and gas operations that are located in specific protected areas or 2) do not meet specific criteria to reduce operational methane emissions.
Let’s dig in to understand each of these:
A Conservation Policy that’s way too conservative
Limited scope: This new policy only applies to a small amount of the hundreds of fossil fuel projects Chubb insures globally.
- It does not apply to existing projects and proposed expansion only new “greenfield” operations.
- It doesn’t account for the actual impact on conservation areas. For example, while Chubb can’t insure a new pipeline that cuts through a national park or wildlife sanctuary, they can insure a massive polluting facility directly next to them, which would still have a devastating impact on the protected area. Air and water pollution does not stop at invisible boundaries.
Still perpetuating environmental racism: In order to be actually effective, conservation policies must be paired with human and Indigenous rights policies like Free, Prior, and informed Consent (FPIC). Furthermore, this policy still allows for more fossil fuel expansion in BIPOC communities that are already overburdened by industry and climate disasters.
Stop EACOP: Chubb has the opportunity to demonstrate their commitment to their new midstream conservation standards by joining 28 other global insurers in a public pledge to not provide insurance for the controversial East African Crude Oil Pipeline that bisects protected areas outlined in their new policy.
So-called Methane Standards that still allow for massive methane expansion
Backing methane build-outs: Unsurprisingly, this new policy allows Chubb to make small operational reductions to their clients’ methane emissions, but changes nothing about their role as main insurer of the methane gas boom in the U.S. Gulf Coast. Chubb must address this hypocrisy by setting clear standards to rapidly transition away from oil and gas clients that are implicated in the global expansion of methane emissions.
Deeply flawed measurements: Chubb’s new measuring criteria only applies to the oil and gas operational emissions, not the actual emissions (Scope 3) of Chubb’s clients. What does that mean? Think of it this way: the operational carbon footprint of getting maintenance done on a car at an auto shop is relatively low, whereas the actual climate impact of driving that car 10k miles a year is way bigger.
- Utilizing a methane emissions intensity standard instead of measuring absolute emissions allows for multinational oil & gas corporations to continue to emit relatively large amounts of methane in comparison to their outsized global emissions. This is akin to saying individual tobacco companies are safe for public health because the measurable volume of chemicals in cigarettes are relatively small compared to the scale of Big Tobacco.
Open-ended and meaningless timelines: While it’s good that Chubb says they’ll deny coverage to oil and gas clients that don’t meet their criteria, the timeline for that compliance is vague, open-ended, and full of loopholes.
- The only timeline stated for smaller oil and gas clients is “a set period of time to develop an action plan.”
- For larger clients, there technically is a defined standard of “measurable through methane emissions intensity of 0.2% or less by 2030,” but it comes with a sizable loophole that allows any client who can “demonstrate progress” and report and measure their methane emissions to presumably delay compliance long past 2030.
Chubb is still a long way from becoming the climate leader they claim to be
While Chubb’s policy update is a step forward, the insurer remains one of the world’s largest insurers of fossil fuels. Chubb isn’t aligned with a 1.5˚C pathway and remains far from global best practice for coal, oil, and gas insurance policies. They can continue business-as-usual underwriting of many new and existing oil and gas projects, including their role as a top insurer behind the methane export terminal expansion across the Gulf South.
These policies are a continuation of Chubb’s incremental approach to set bare minimum standards for client underwriting while continuing business-as-usual as one of the world’s largest fossil fuel insurers.
While inadequate, even these small wins are proof that people power is moving Chubb. We need to keep it up to raise the bar on their policies and create real life benefits for frontline communities now.
