What's Happening?
Chubb, a major insurer with U.S. operations, is reportedly providing reinsurance coverage for a coal power station in Vietnam, potentially reversing its 2019 climate policy. The Bureau of Investigative Journalism revealed that Chubb is underwriting Nghi Son 2, a 1.2GW coal-fired power plant, which contradicts its guidelines prohibiting coverage for companies deriving more than 30% of energy from coal. This plant is expected to emit up to 175 million tonnes of carbon dioxide over 25 years. The report suggests Chubb offered coverage at a discount compared to the previous year, raising concerns about the insurer's commitment to its climate policy.
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Why It's Important?
The alleged reversal by Chubb could have significant implications for the insurance industry's role in climate change mitigation. Insurers have been moving away from coal, as evidenced by a University of Zurich study showing a reduction in insured coal mines and coal amounts in the U.S. between 2014 and 2024. Chubb's actions may encourage other insurers to exploit loopholes in climate policies, potentially slowing the transition away from fossil fuels. This development could impact global efforts to reduce carbon emissions and combat climate change.
What's Next?
The insurance industry faces pressure from groups like Insure Our Future, which demand halting underwriting for new fossil fuel projects and divesting from companies without transition plans by 2025. Chubb's reported actions may prompt further scrutiny and calls for stricter adherence to climate policies. Stakeholders, including environmental groups and policymakers, may push for more transparency and accountability in the insurance sector's climate commitments.
