The French insurance company AXA has announced its own plan to help phase out coal production in Europe by 2030, under which it would no longer be insuring companies that are too dependent on fossil fuels. According to NGOs, this plan has “no blind spots”. EURACTIV France reports.
AXA announced on Wednesday (27 November) it would no longer insure companies that are too dependent on fossil fuels, as part of its coal phase-out strategy. It plans to do so for EU and OECD countries by 2030 and for the rest of the world by 2040.
But could this be just another large company announcing its ‘greenwashing’ plans?
It would appear not, as the climate NGO Friends of the Earth immediately hailed AXA’s ambitious plan, calling it “the best policy ever adopted by a financial actor”.
This could put serious pressure on the world’s leading green finance actors, who are due to meet in Paris on 29 November during Climate Finance Day. It could also pressure governments, which are set to meet for the COP 25 in Madrid in December.
In more concrete terms, companies that generate more than 30% of their turnover or electricity production because of coal, and produce more than 20 million tonnes of coal each year, will no longer be insured by the French giant.
In another announcement, AXA also asked its clients who would be affected by these new guidelines to publish a coal phase-out plan by 2021.
AXA’s plan does not have “blind spots” because the insurer is committed to no longer extending support to companies that rely heavily on coal, both within its investor portfolio and in its insurance business, where it ranks second in Europe.
“To succeed in this new phase, AXA will use all the levers at its disposal as a world-class investor and insurer,” the group said in a financial statement.
As a result, many large European companies such as Engie, RWE and Adani will be affected by the decision.
“AXA is once again demonstrating climate leadership, of which the likes of BNP Paribas, SCOR and other international financial players should be ashamed,” said Lucie Pinson, the private finance campaigner at Friends of the Earth France and coordinator of the Unfriend Coal campaign.
“And yet the measures announced are the only ones that can be defended in a context of climate emergency: zero tolerance towards companies such as Adani or KEPCO that are betting on coal development and stricter support conditions for other companies in the sector,” she explained.
The measures taken by AXA should make it possible to accelerate the implementation of the plans to phase out coal announced by the various insurers, which are often incomplete and whose targets are more distant.
“German insurers who have made a commitment to have zero coal in their portfolios by 2038 or 2040 must wake up and realise that climate science requires a release as early as 2030 in Germany and other European Union and OECD countries,” said Regine Richter, head of the energy campaign at the climate and human rights organisation Urgewald.
The only drawbacks noted in AXA’s climate action plan are linked to the transition obligations.
Indeed, AXA has also announced the doubling of its green investment objective to €24 billion by 2023.
But this doubling will take place through the introduction of new “transition obligations”, which have less-strict criteria than those imposed on green obligations and are, therefore, not unanimously endorsed by environmental advocates.
“Several projects will be financed through this obligation[…] including gas projects,” said Pinson. While “AXA is imposing its climate leadership in terms of exiting coal, there is still a lot to be done on gas and oil,” she concluded.
[Edited by Zoran Radosavljevic]