Reposted from Insure our Future
Lloyd’s of London published its 2021 Environmental, Social and Governance (ESG) Report two days ahead of its Annual General Meeting on May 19.
Lloyd’s second ESG report is a document almost completely lacking in substance which does more to obscure the climate destroying actions of its members than to shed light on how it intends to reach its often stated net-zero by 2050 ambition. It has almost no information on concrete climate action and raises many serious questions about Lloyd’s.
Most notably, Lloyd’s second ESG report says nothing about the outcomes of the climate commitments it made in its first ESG report released at the end of 2020. Previously, Lloyd’s stated it was asking its managing agents to not provide any new cover for coal-fired plants, coal mines, oil sands and Arctic energy exploration from 1st January 2022. Yet, its current report fails to report on whether or not its members are fulfilling this commitment.
Whilst Lloyd’s ESG report doesn’t tell us, we already know from other sources that not all members of Lloyd’s market have stopped providing new insurance cover for new coal projects.
For example, a recent public report by London based insurance broker Alesco, noted that while many Lloyd’s members have adopted the policy, others continue to accept new coal business.
Why has Lloyd’s, which knows these facts, not been open or honest about them in this report? Which Lloyd’s members are ignoring Lloyd’s stated ambitions? What action is Lloyd’s taking to bring those members into line? What value do Lloyd’s stated climate ambitions and targets have when they are so plainly ignored by some of its members with no consequence?
Instead of addressing these obvious questions Lloyd’s is trying to cover up its failure to deliver on its climate commitments. In other words, Lloyd’s 2021 ESG report is greenwash.
Whilst avoiding mention of its failure to have all members exclude the very worst fossil fuel projects, this report goes much further in the wrong direction. Lloyd’s doubles-down on requiring its members to continue to insure what it terms the “harder-to-abate sectors”, by which it presumably means it plans to adopt no restrictions on new oil and gas exploration. Lloyd’s completely ignores the IPCC, the IEA and others which make clear that no new oil and gas projects are compatible with staying within 1.5C global warming, and that existing production needs to be phased down.
One example of concrete climate action Lloyd’s trumpets is appointing its first Sustainability Director. The ESG report fails to mention that Lloyd’s management gave the role to one of its Senior Public Relations Officers, who had no previous sustainability-related experience. Is that an example of bringing in a great communicator to an important new priority role? Or a classic example of treating ESG as more of a public relations exercise than a substantive issue? What is clear is that the quantity and quality of largely substance free public relations materials from Lloyd’s about sustainability has increased significantly in the last 12 months.
Lloyd’s Council Chair Bruce Carnegie-Brown and its CEO John Neal sign off the report saying:
“We hope this report equips you with a helpful and comprehensive summary of our ESG activity – and we look forward to working with you to build the braver world it imagines.”
In a climate crisis that presents an existential threat to life on earth, Lloyd’s is stuck in its PR bubble talking about sharing risks to create a braver world, when in reality its members provide the insurance cover for, and invest in, climate and human-rights destroying fossil fuel projects and companies.
Lloyd’s new ESG report exemplifies many of the worst aspects of corporate greenwashing. Saying it is committed to net-zero by 2050, but not having detailed targets and not enforcing the targets it does express is not a climate science aligned policy, it is greenwash. Lloyd’s Council, led by its Chairman Bruce Carnegie-Brown, needs to start taking genuine climate action by ensuring Lloyd’s members stop insuring and investing in new fossil fuels and phase out existing investments and insurance in-line with climate science. Nothing less will do.
Finally, there are a few words in the report that I do agree with:
Rebekah Clement Lloyd’s new Sustainability Director: “The work is nowhere near done…”
David Sansom Lloyd’s Chief Risk officer: “We have much more to do…”
Alesco Energy Update 2022. Page 21: “1 January 2022 saw the introduction of the new Lloyd’s directive as regards to coal; with the initially proposed stance being that no new coal business was to be underwritten from that date. However, in light of subsequent discussions between various parties, there has been a subtle change of emphasis with each syndicate now having a more individual responsibility towards their attitude to the new coal business. Many have chosen to remain with the existing policy of not putting any new coal accounts onto their books; but others have adopted a policy of accepting new business where the client can demonstrate a clear approach to working towards an orderly transition to renewable energy”.
Lloyd’s of London member Arch Insurance has committed to no longer insure the Trans Mountain tar sands pipeline after its current insurance policy expires this summer. Arch joins seventeen insurance companies, including fellow Lloyd’s syndicate Aspen most recently, that have dropped Trans Mountain or vowed not to insure the Trans Mountain Expansion Project.
Amid pressure from activists to break ties with the tar sands pipeline expansion, in an email to Coal Action Network, a spokesperson for Arch stated:
“We can confirm that Arch Capital Group Ltd, on behalf of its underwriting operations, will not issue any future insurance policies covering the Trans Mountain Pipeline.”
Trans Mountain experienced firsthand the impacts of climate chaos in 2021. Following historic wildfires in the summer, November brought extreme flooding and mudslides that shut down the existing line for three weeks. This resulted in over two months of lower capacity oil flow.
Flooding displaced over 14,000 meters of stockpiled pipe meant for the expansion, and the company had to use hundreds of meters of pipeline from the new construction project to repair the old line.
More than 18,000 people were displaced from their homes in the climate catastrophe.
Trans Mountain pipeline expansion faces severe flooding and river crossing risks which should make insurers run a mile.
Equipment and generators were submerged in the flooded Coquihalla River; then the storms of November 2021 hit, adding half a billion dollars to the project cost.
Despite this, TMX continues to operate recklessly in flood-risk zones according to Ian Stephe of the WaterWealth Project :
"The company is recklessly setting the stage for further problems at the Vedder River crossing in Chilliwack where the river overflowed dikes. The company filed a geotechnical report that was withheld during route approval hearings and that only finds this major river crossing feasible as planned based on assumptions that were outdated when the report was written and that remain unmet. As a community member with a long history on this project, I am concerned about the impacts from this pipeline on waterways, and insurers should be too."
Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative raised the question; who will fund a project this as risky as TMX?
"As the 18th insurer to rule out Trans Mountain, Arch is confirming that fossil fuel projects without Free Prior and Informed consent are a material risk. Trans Mountain's steps to keep their insurers secret will not stop the momentum towards a safer and more just world. Trans Mountain is currently looking for more financing to continue construction, but who will fund such a risky project?"
According to the last insurance certificate with company names listed, Lloyd’s syndicates collectively were the biggest insurer for Trans Mountain. Chubb and Zurich were the biggest individual insurers listed providing coverage, but since then, both Chubb and Zurich have cut ties, making Lloyd’s a remaining top target.
By refusing to rule out Trans Mountain across its marketplace, Lloyd’s of London is failing its members and the millions of people whose lives are being destroyed by climate change. With their understanding of risk, why hasn't the industry taken action decades ago?
With Arch and Aspen cutting ties, Beazley and CNA Hardy are the prime targets for public pressure.
This could all be avoided if Lloyd’s ended insurance for fossil fuels across its marketplace.
Lloyd’s of London has increasingly been the target of protests in the UK for its connection to the pipeline in the lead up to Lloyd’s of London actual Annual General Meeting on May 19. Resistance has included 60 people from Extinction Rebellion blocking the entrances at their iconic headquarters last month and a climate memorial led by Pacific Islanders and youth strikers from climate change-affected communities.
Delayed by over a decade of powerful Indigenous-led resistance, court cases, corporate campaigning, construction mishaps, and cost overruns, TMX is on it's knees. Matt Reml, (Lakota) Mazaska Talks says:
“Thanks to the effort of frontline Indigenous communities and grassroots activists, Lloyd’s of London syndicate Arch Insurance joins a growing list of insurance companies committing to no longer providing insurance for the Trans Mountain tar sands pipeline. This is a victory for Indigenous rights, environmental and climate justice. It is time for the Trudeau administration to end the Trans Mountain pipeline."
The projected cost of the Trans Mountain expansion project has quadrupled, according to recent numbers from the Canadian Ministry of Finance. The current price tag is approximately CA$21.4 billion, and the federal government pledged that it would not provide any additional funding. This leaves the budget $8.8 billion CAD short, demonstrating overwhelming opposition and challenges to building oil and gas pipelines.
At the end of November 2021, we noticed the licence application for an extension to 'Aberpergwm Colliery' in South Wales on the little-publicised webpage of the Coal Authority (regulator for all coal mining across the UK). This webpage contains a listing of all coal mine licences and licence applications and is a good one to bookmark and check back regularly.
We noticed the application was made in 16/09/2020, so we knew it could be awarded a licence tomorrow or in a year's time. But after checking no other group was campaigning on this already, we sprung into action to ensure licencing wasn't just waved through. In early December we started raising awareness of the licence application over social media, and shared key facts about the coal mine.
We spoke with Minister Lee Waters of the Welsh Government who insisted the his Government cannot use their powers under the Wales Act 2017 to stop the Aberpergwm coal mine expansion - since the licence's origins dates back before the Wales Act 2017 came into force. Therefore, it was for the UK Government to stop this licence. But the UK Government publicly disagreed in a BBC article on November 4th, arguing that the Welsh Government can apply the Wales Act 2017, and for that reason it would not be appropriate for the UK Government to step in.
In short, both the Welsh and UK Governments pointed the finger of blame at each other and neither would take responsibility nor resolve the issue between them, which actually had the power to intervene.
Coal Action Network launched a mass email campaign on 20/12/2021, encouraging our supporters and the public to contact Ministers Lee Waters of the Welsh Government, and Michael Gove of the UK Government. By the end of December, over 4000 emails had been sent to both Ministers, asking them to agree which government has the power to stop the Aberpergwm coal mine expansion - and to step in to stop the licence.
Both Minister failed to respond to any of the 4000 emails, ignoring the thousands of concerns expressed to them.
After both Ministers Lee Waters and Michael Gove failed to respond to any of the 4000 emails, and ignore the thousands of concerns expressed to them, Coal Action Network followed with an open letter to them. This letter summarised the main concerns that our supporters and the public wrote to them with, and asked for a response to these concerns.
Again, both Ministers failed to respond and we were getting increasingly concerned their inaction and refusal to communicate would let this licence application slip through and commit us all to continued coal mining at Aberpergwm until 2039.
On 25th January 2022, the Coal Authority awarded Aberpergwm its coal mine expansion licence, quietly updating its listing of coal mining applications and licences. In response to an email from Coal Action Network, the Coal Authority claimed it could not refuse the licence on any grounds apart from a narrow criteria set by the 1994 Coal Industry Act. If an applicant meets this criteria, the Coal Authority claims it must grant it the licence.
Coal Action Network contacted Richard Buxton Solicitors to find out if there is still any hope of stopping this coal mine, and whether the Welsh Government can still intervene - as the UK Government claims it can.
In February 2022, CAN staff visited the site of the Aberpergwm coal mine and met with local people in Glynneath to deepen our understanding of local views and awareness of the looming coal mine expansion. We learned that people living in towns near to the coal mine felt reliant on the coal mine because it brought some business into an area struggling economically and with underfunded services such as public transport links between nearby towns. We have heard similar stories of other towns, forced by a lack of Government investment, to choose between a coal mine with HGV traffic, noise, and disruption, or further job losses and closures.
We also found only low levels of awareness that the coal mine was recently licenced for a massive expansion, indicating that coal mine operator, EnergyBuild Mining Ltd, had not communicated this with local people.
Coal Action Network reached out to Wales-based environmental groups and engaged them on the issue of the impending Aberpergwm coal mine expansion licence. After speaking of 100 million tonnes of CO2 and up to 1.17 million tonnes of methane expected to be generated from this expansion, they took action.
Actions have included blockading the site office at the coal mine location on 11th March, and a theatrical noise demonstration outside the Senedd on 17th March 2022 which was attended by Wales Green Party leader Anthony Slaughter and Liberal Democrat party leader, Jane Dodds, who both delivered speeches on the need to prevent this coal mine expansion.
Richard Buxton Solicitors and Barrister Estelle Dehon (QC) represented Coal Action Network, believing there to be a case to argue:
After 'pre-action letters' to the Welsh Government and UK Coal Authority, Coal Action Network's legal team submitted an application in early April for a judicial review on these grounds.
Coal Action Network is a small grassroots organisation, so we need to fundraise £65,000 to challenge the Welsh Government and Coal Authority in a judicial review. These funds are needed to pay for our legal costs, potentially a portion of the other side's if we lose, as well as court fees.
But, if we win, we would set a legal precedent that could make it significantly harder for future coal mining across the UK, potentially laying a 475 year industry to rest and helping to safeguard future generations.
Please share and donate to our CrowdJustice crowd funder.
Our legal team has been informed that our legal challenge will be heard by a senior High Court judge on 15th-16th March 2023. Permission to proceed to a full Judicial Review in the High Court indicates we have a solid case and puts us an important step closer to reversing January's decision to licence a 42 million tonne expansion of the Aberpergwm coal mine. Our crack legal team, Richard Buxton Solicitors and Barrister Estelle Dehon QC, will challenge the parts that The UK Coal Authority and the Welsh Government played in this disastrous licence slipping through.
Coal Action Network held an informal briefing in the Senedd (Welsh Parliament) sponsored by Jane Dodds, Member of the Senedd (MS).
The event was attended by MSs and their staff who heard why the proposal to extend Aberpergwm coal mine should be stopped and how Universal Basic Income could answer some of the issues for workers during the transition to a low carbon economy.
On 15 March 2023, we arrived outside the Cardiff courts for the Judicial Review hearing, to press teams and a strong demonstration in support of our case for a more sustainable future in Wales and the UK. We feel confident that our legal team made convincing and consistent arguments rooted in the law. A decision should be made by the judge in 2 weeks to 3 month from today. Read more...
On 19th May 2023, the Judicial Review decision upheld the mine to continuing to operate until 2039 to the tune of over 100 million tonnes of CO2. This judgement comes fewer than two months after the IPCC released a report sounding the ‘final warning’ of irreversible and catastrophic climate change. Although ultimately the judge’s decision upholds the Aberpergwm coal mine in the midst of our climate crisis, the judgment agrees with our legal team on a number of crucial points, creating some optimism around a possible appeal. We'll need to weigh up time and funding with the chance of a successful outcome. Read more...
On the 19th of May, The Hon. Mrs Justice Steyn DBE decided in favour of the Welsh Government and Coal Authority, but granted us permission to appeal the decision about the Welsh Government less than 2 weeks later, on 31st May.
The grounds for this appeal are:
The High Court decided against Coal Action Network and found against our appeal in February 2024. The grounds were different to those given by the lower court.
Consequently Coal Action Network appealed to the Supreme Court. Sadly, in July 2024 the application to the Supreme Court was rejected.
This is the end of the road for the legal challenges against the coal mine extension, but we are working on other strategies to keep coal under the ground at Aberpergwm and elsewhere. Thanks for all your support in this campaign.
Coal & refuse to be excavated: 72 million tonnes in total - 30 million tonnes of which will be "middling" coal to be dumped or put back into the coal mine.
Coal to be sold: 42 million tonnes during the life of the extension
CO2: 100-120 million tonnes of CO2, according to uses listed below (2022 BEIS Conversion Factors)
Methane: up to 1.17 million tonnes of methane, a powerful climate accelerant
Coal operator (mining company): Energybuild Ltd/Energybuild Mining Ltd.
Type: Anthracite
Claimed uses:
The planning application said power stations and steel works. With Aberthaw power station closed, Energybuild now talks of Pulverised injection for steelmaking, household heating, cement, and water filtration.
County Council Local Planning Authority: Neath Port Talbot
Address: Glynneath, Neath, SA11 5AJ
Physical size: Because this is an underground mine, much of the excavation would be invisible but very real, as communities victim to flooding mine shafts have experienced. The underground tunnelling has permission to extend to 2.3km squared, taking you roughly half an hour to walk from one side of the tunnels to the other. And this doesn’t factor in the vertical shafts, sending offshoots that go beneath the River Dulais.
Time: Planning permission to mine coal until 2039 (this is often subsequently extended).
Published: 22/04/2022
Lloyd’s of London member Aspen Insurance has pledged to cut ties with the Trans Mountain (TMX) tar sands pipeline after its current insurance policy expires in summer 2022.
In an email to Coal Action Network, a spokesperson for Aspen stated:
“As a matter of corporate policy, Aspen does not comment on the specifics of any application for insurance we receive, any insurance or reinsurance contract we underwrite, or any claim we pay, however, we can confirm that we do not plan to renew the Trans Mountain Tar Sands Oil Pipeline project.”
Aspen is the seventeenth insurers to rule out insuring the toxic pipeline. It follows Chubb and Argo Group in 2021, which cited climate, environmental, and social risks.
Front-line community leaders supported the move. Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative said:
“Aspen is joining insurance industry leaders in recognizing that fossil fuel infrastructure projects that don’t have Free Prior and Informed Consent are a material risk. It’s time for the rest of the Lloyd’s syndicates and the whole insurance sector to follow suit before the climate crisis gets worse”
A growing number of insurers have recognized the massive risks of the 69-year-old pipeline. The project would increase emissions equivalent to 2.2 million cars and has been delayed for years in the face of Indigenous-led resistance.
The Intergovernmental Panel on Climate Change and the International Energy Agency reports have made it clear. Any new fossil fuel infrastructure is incompatible with global climate goals of limiting temperature increases to below 1.5 degrees C. This includes the Trans Mountain pipeline.
Lloyd’s of London has been the target of a range of protests around the Trans Mountain pipeline. 60 people from Extinction Rebellion blocked the entrances at their iconic headquarters last week. A climate memorial was led by Pacific Islanders and youth strikers from climate change-affected communities.
Since this campaign began, we've seen insurers at Lloyd’s of London come under increasing pressure to cut ties with Trans Mountain. Aspen is listening, but Lloyd’s syndicates like Arch and Beazley must follow suit. We need a step change across the whole Lloyd’s marketplace.
We are calling for leadership that mandates all insurers in their marketplace to end underwriting of new fossil fuel projects. While Lloyd’s CEO John Neal blocks meaningful climate action, we expect to see ongoing protests on Lloyd’s doorstep.
In February 2021, the Canadian-owned Trans Mountain corporation petitioned the Canada Energy Regulator to keep the names of its insurance backers secret. It stated that it had “observed increasing reluctance from insurance companies to offer insurance coverage for the Pipeline and to do so at a reasonable price.”
This shows that the tar sands exclusion policies increasingly adopted by insurers are having a tangible impact on the price and availability of insurance for the sector.
According to recent numbers from the Canadian Ministry of Finance, the projected cost of twinning the Trans Mountain pipeline has nearly tripled. The latest figures show that the current price tag is approximately CA$21.4 billion, and the federal government pledged that it would not give any more money to the pipeline. Elana Sulakshana, Senior Energy Finance Campaigner at Rainforest Action Network said:
“This announcement from Aspen makes clear that the Trans Mountain pipeline network is facing serious risks that financial institutions do not want to support: lack of consent from Indigenous communities, decaying infrastructure, mounting costs, and a massive carbon footprint."
Aspen needs to clarify that its commitment rules out all parts of the existing Trans Mountain pipeline and the expansion project in the future.
It's time for TMX's other insurers to rule out continued support for the project and the tar sands sector. This includes Energy Insurance Limited, Liberty Mutual, Lloyd’s of London and syndicates, Starr, Stewart Specialty Risk Underwriting, and W.R. Berkley.
... So we thought we would!
Volunteers from Neath Port Talbot Friends of the Earth have given out flyers in Glynneath to start conversations and direct people towards this information about the mine expansion, and about how you can take action as people living near Aberpergwm.
Aberpergwm has permission to extract over 40 million tonnes of coal over 18 years: 2.33 million per year. The mine is set to expand under Seven Sisters , Treforgan and Crynant and up to Varteg Hill to the West.
According to legal advice received by the Coal Action Network, the Welsh Government should have intervened to stop the mine AND the Coal Authority could have taken the mine's climate change impacts into account before granting it permission. As a result the mine is up for debate in court.
Allowing the mine contradicts both the UK and Wales' climate commitments, the Wales Future Generations Act and the Welsh Planning Policy Framework
This increase would mean:
There are no plans to increase the number of jobs.
Jobs that are promised are precarious because...
No.
The company paint a picture of an expanding global market for their coal for water filtration, securing jobs into the future.
But the quality of the coal in this seam makes it unsuitable for water filtration as the company claim [8]. The nine foot coal seam in this area has a lower carbon content than that needed for water filtration [9]. So only a tiny percentage of the coal, if anything, can be used for this.
Instead Aberpergwm is predicated on the future of coal in steel production, which is not at all secure [10]
Steelworks using coal are some of the UK's biggest polluters; Tata Neath Port Talbot is by far the biggest single site source of greenhouse gas emissions in Wales [11] and Aberpergwm proposes to continue contributing to that for another 20 years
Meanwhile, scientists agree that no new coal can be extracted anywhere in the world if we are to stay below 1.5 degrees of warming [13] which is considered the safe limit for life on the planet.[14].
Furthermore, the coal in the mine is anthracite, which results in a high-methane producing operation. The 1.17 million tonnes of methane that would be released if this coal is to be mined would act quickly on the atmosphere, as methane is 80 times more powerful than CO2.[12]
Flooding events like those seen in the Neath Valley, and other catastrophic climate events globally are set to become more frequent if current levels of methane and greenhouse gas emissions are maintained
Local residents told The Guardian that the mine is "Not the future we should be going for".
Couldn't there be a long-term and green source of jobs for Glynneath, Cwmgwrach, Blaengwrach and the Neath Valley?
Blaengwrach resident Emma Eynons told CAN:
The communities in my local area have been suffering for many years with a lack of investment by the Welsh Government.
We live in an area of outstanding beauty, and of scientific interest, with so much wildlife and natural resource all around us. We would love to share our beautiful home with the rest of the world and establish a thriving community.
We want tourism, small business growth, regeneration plans which will mean real jobs with futures as we move forward. A community transport scheme would alleviate the social problems faced by our isolated residents
As a traditional mining community, of course we should celebrate our proud history of mining achievements. However, I would ask the Welsh Government to consider what the future of our communities should be.
It's really easy to write to Lee Waters MP: Wales' Deputy Minister for Climate Change. The Welsh Government needs to hear personal letters from local residents and people in South Wales.
You don't have to say very much, you just need to show you care, and pick one or two facts or themes from this page in your own words. Three sentences are enough!
Steps to write to Lee Waters MP:
Please send any replies you recieve to info@coalaction.org.uk
For the case against the mine to succeed we have to fund it! Please share our crowdfunder page
1Planning Application P2014/0729 Mining Zones Map (Neath Port Talbot Council planning portal)
[2]Coal Authority production statistics: 25666 (2019) 16957 (2020) 19690 (2021) tonnes was produced. Average 20,771 tonnes of coal.
[5]Planning Permission document P2014/0729 (7)
[6] Channel 4 News: https://www.channel4.com/news/are-cop26-promises-on-coal-being-broken (04.02.22)
[7] Wales carbon budgets/targets March 2021: https://gov.wales/climate-change-targets-and-carbon-budgets
[8] Core samples show 88.3% fixed carbon content https://orca.cardiff.ac.uk/115771/1/Zagorscak%20and%20Thomas%20(2018).pdf (126)
[9] In excess of 95% fixed carbon content: https://mineralmilling.com/anthracite-filter-media/
[10] Coal in Steel : Problems & Solutions (Coal Action Network)
[11] Wales carbon budgets/targets March 2021: https://gov.wales/climate-change-targets-and-carbon-budgets
[12]Channel 4 News report, research provided by Global Energy Monitor https://www.channel4.com/news/are-cop26-promises-on-coal-being-broken (04.02.22)
Insurance giant rules out support for new coal, tar sands, and Arctic energy exploration projects and commits to Net Zero emissions by 2050 for underwriting and investments
American International Group Inc. (NYSE: AIG) today announced major new company-wide climate commitments, including commitments to no longer provide underwriting and investments in the construction of any new coal-fired power plants, thermal coal mines, or oil sands. Further, the company will stop providing insurance cover and investments in any new Arctic energy exploration.
The commitments, which come after years of pressure from Public Citizen, Insure our Future, and other environmental groups, will also phase out existing underwriting and investments in companies by January 1, 2030 with 30 percent or more of revenue from coal or oil sands, or 30 percent electricity generated from coal.
“As one of the last major insurers without restrictions on coal insurance, AIG’s new commitments to reduce underwriting for coal, tar sands oil, and Arctic oil and gas are a major step forward for people and the planet,” said Hannah Saggau, insurance campaigner with Public Citizen. “AIG has vaulted itself from a laggard in the industry to a leader in the U.S., and we look forward to working with it to meet and improve on these commitments.”
In addition to pumping the brakes on coal and tar sands projects, AIG is also committing to reach net zero greenhouse gas emissions across its underwriting and investment portfolios by 2050 and adopt science-based emissions reduction targets in line with the goals of the Paris Agreement. In the company’s statement, AIG committed to release more information about its phase-out of fossil fuels in the coming months and to provide transparent reporting of its progress.
For over a year, Public Citizen has used direct actions, petition drives, policy advocacy, and behind the scenes pressure aimed at AIG and its CEO Peter Zaffino to demand the company stop supporting the fossil fuel expansion driving the climate crisis.
Today’s announcement marks the beginning of a new chapter in the campaign to improve AIG’s fossil fuel policies. AIG joins over 37 companies that have committed to end or restrict insurance for new coal projects, including Travelers, which recently adopted a policy. Among major U.S. insurance companies analyzed in Insure Our Future’s 2021 Scorecard on Insurance, Fossil Fuels, and Climate Change, only Berkshire Hathaway and W.R. Berkley still underwrite coal with no restrictions.
While these commitments represent major steps, the new AIG policy needs clarification and improvement.
“Ending support for coal expansion projects is strong and necessary—and it should be extended to all fossil fuels,” said Saggau. “The International Energy Agency has made it clear that to avoid climate catastrophe, there is no room for any fossil fuel expansion. AIG’s commitment to science-based climate targets should mean an end to all fossil fuel expansion, but today’s announcement doesn’t address that question.”
The new policies could have real impacts on ongoing projects around the world.
Notably, AIG’s commitment makes it the first U.S. insurer to rule out insurance for Arctic energy exploration, which pose grave threats to Indigenous rights and local ecosystems. At least 12 insurers have restricted support for oil and gas drilling in the Arctic Refuge. At the same time, however, today’s release from the company does not clearly define what areas of the Arctic nor what kind of energy exploration activities are covered by its commitment, nor does it implement a broader policy to ensure that all of the projects it insures have obtained the Free, Prior, and Informed Consent of impacted Indigenous communities.
In Canada, in the most recently publicly available insurance certificate, AIG provided coverage for the Trans Mountain Pipeline. The pipeline is a major environmental hazard and a violation of First Nations’ rights, and its expansion project consists of an entirely new pipeline that would ship more than 590,000 barrels per day of highly polluting tar sands crude oil to the coast of British Columbia. While the commitments released today ruled out insurance for the construction of any new oil sands projects, it is not clear if this includes tar sands transport projects like the Trans Mountain expansion.
“As one of the remaining potential insurers of the Trans Mountain pipeline, AIG’s commitment to rule out insurance for some tar sands projects is a first step but not enough,” said Charlene Aleck, spokesperson for the Tsleil-Waututh Nation Sacred Trust Initiative. “The Trans Mountain pipeline violates Indigenous rights and threatens our land, water, and climate. With the cost ballooning to C$21.4 billion, and the need for more private investment, this pipeline is as risky as ever. AIG must wake up to the significant financial, reputational, and environmental risks of the highly polluting tar sands sector and explicitly rule out insurance for all new tar sands transport projects.”
Written by Insure Our Future
The situation with coal production and use in the UK is changing. There are no new opencast mines proposed; only one proposed opencast coal extension and one existing opencast extraction site. However there are three new underground coal mine applications or extensions proposed and there was an increase in coal use in power stations between 2020 and 2021.
As you can see from the image above coal use in power stations has dropped dramatically since 2012, when 43% of electricity in the UK grid was produced from coal combustion, to just 1.72% in 2020.
Coal use hit a record low in 2020 supplying 253 TWh to the grid, and increased slightly the following year to 267 TWh, as the economy ramped back up from covid-19. (The data for 2022 is only for the first fortnight of the year). Thanks to MyGridGB for this data.
There are presently three applications for new/ extended underground coal mines.
Proposed underground mines
Aberpergwm Colliery (Energybuild Ltd) in Neath port Talbot had planning permission for a 40+ million tonne underground (anthracite) coal mine approved in 2018. The Coal Authority offered the coal company, a license to extract coal in January 2022. Coal Action Network are currently considering legal action against the Coal Authority and Welsh Government for failing to stop the mine being licenced.
Lochinvar (Australian New Age Explorations) are applying for licences for an underground coking coal mine at Lochinvar in three sections, on the Scottish border. If constructed the company hopes to be producing coal until 2044. The first of the three areas would supply an average 1.4 million tonnes of coal each year.
Woodhouse Colliery proposed by West Cumbria Mining had its proposal for a new 1.78 million tonne per year underground coking coal mine off Whitehaven, Cumbria called in by the Secretary of State in 2021. The Planning Inspectorate ran a Public Inquiry in September 2021 and the report is expected to be given to the Secretary of State for Levelling Up, Housing and Communities, Michael Gove imminently.
There is currently an application to extend a previously operated mine at Glan Lash in Camarthanshire by Bryn Bach Coal.
The last existing opencast coal mine in the UK is Ffos-y-fran, operated by Merthyr (South Wales) Ltd in Merthyr Tydfil, it is widely reported to be due to close in October 2022.
There are four major UK steel producers, half are using coking coal and produce much higher emissions that the two which recycle scrap steel.
Tata Steel
Port Talbot steel works, in Neath Port Talbot, Wales, is the second biggest UK single site emitter of carbon dioxide.[1] The plant uses coking coal to make steel in blast furnaces.
British Steel
Currently British steel’s Scunthorpe plant can use a maximum of 25% to 30% recycled content using Basic Oxygen Steel making. It currently uses coking coal.
Liberty
Liberty Steel, which has sites in Newport and in Tredegar, has said it aims to become a carbon-neutral steel producer by 2030. The site currently uses Electric Arc Furnaces and recycles scrap metal so does not use coking coal.
Celsa
Celsa’s Cardiff steelworks uses 100% recycled scrap steel in its products and so does not need coking coal.
For more details see our report Coal in Steel.
Ratcliffe on Soar power was given a contract to supply 411 MW to the grid from coal in 2022/23 at a Capacity Market auction in Feb 2022. Ratcliffe's owner Uniper plans to turn the power station into an incinerator for household waste and produce heat and electricity operational by 2026. It has secured planning permission.
Drax power station is supposed to have stopped burning coal this year. However it has offered that it could stay online until 2024 to the UK government.
EDF are closing their West Burton coal power station in September 2022.
Kilroot coal and oil power station in Northern Ireland is going to be converted to gas. It has been announced that Kilroot will stop consuming coal in September 2023.
Coal phase-out in the UK is expected by October 2024. Given that coal consumption in power stations is very low in the summer, the last generation could be April 2024.
[1] The Coal Authority, Production and Manpower returns for three month period January to March 2020 and other sources.
Queries and media contact: info @ coalaction . org .uk (without spaces)
Meeting reveals Neal’s failure to understand the need to stop insuring fossil fuel expansion
On February 16, Insure Our Future network members challenged John Neal, CEO of Lloyd’s of London, on the insurer’s fossil fuel policies and actions in a long awaited, but ultimately very disappointing, on-the-record meeting at Lloyd’s Lime Street headquarters.
The meeting between Neal, Lindsay Keenan, European Coordinator of Insure Our Future, and Mia Watanabe, UK Campaigner at Market Forces, revealed major problems with how Lloyd’s, and in particular its CEO, is addressing the climate crisis. The meeting started with Neal accepting a letter with 137,400 signatures on behalf of SumOfUs, an Insure Our Future network member. The letter demanded Lloyd’s stop supporting new and expansionary coal, oil and gas projects, including the East African Crude Oil Pipeline, Trans Mountain pipeline, Adani Carmichael coal mine, and oil drilling by the Bahamas Petroleum Company.
In stark contrast to statements made by Lloyd’s Council Chairman, Bruce Carnegie Brown, and what is clearly written in Lloyd’s December 2020 ESG report, Neal stated that in his view Lloyd’s ESG policy was nothing more than a “‘provocative discussion document”.
Revealingly, Neal claimed that, following the publication of the report, he had been contacted and lobbied by regulators, corporations, and state and national officials from around the world who said they were against the ESG policy and concerned about its ambitions. He confirmed that Lloyd’s had subsequently informed its members the ESG commitments were non-mandatory guidelines.
Despite lending a sympathetic ear to industry stakeholders, Neal was unequivocal in stating that he did not see it as his role to meet with representatives of communities impacted by the fossil fuel projects that Lloyd’s insures or invests in.
While professing to respect climate science and the International Energy Agency’s (IEA) 2021 report, Neal appeared to not understand nor accept the report’s key finding that there are no new coal mines or oil and gas fields approved for development in a Net Zero by 2050 pathway. Under Neal, Lloyd’s has no plan to align its policies with the IEA findings.
“It is a serious problem that John Neal has not been well enough briefed, or is just personally sceptical, about climate science and the findings of the International Energy Agency. An ESG policy touted by Carnegie-Brown as a ‘plan for becoming a truly sustainable insurance market’ has, under John Neal, become nothing more than a ‘discussion document’ that syndicates can take or leave as they see fit. It is abundantly clear that John Neal prioritises profits at the cost of people and planet, and that under his leadership Lloyd’s policies fail to match its climate rhetoric,” said Lindsay Keenan, European Coordinator of Insure Our Future.
Neal further exposed his disregard for climate action by failing to make a clear commitment that Lloyd’s members would not insure the East African Crude Oil Pipeline and saying Lloyd’s has no current plans to adopt an exclusion policy for oil and gas expansion.
On the Adani Carmichael coal project in Australia, a source of significant controversy for Lloyd’s over the last two years, Neal said that “to the best of my knowledge” the project is no longer insured in the Lloyd’s market. While Neal encouraged syndicates not to underwrite Adani, he refused to give a clear commitment on its status inside Lloyd’s, both now and in the future.
“The #StopAdani campaign has done the work John Neal should have done, and convinced the vast majority of its insurers to commit to never insuring the disastrous Adani Carmichael thermal coal project. Now, Neal needs to come clean and officially clarify if the Lloyd’s market remains exposed to Adani, and make the promise to not insure the climate-wrecking project in the future. If Lloyd’s cannot take this basic step, then its ESG policies have failed their most simple test and Adani Carmichael will continue to be a stain on its reputation,” said Mia Watanabe, UK Campaigner at Market Forces
Lloyd’s stated commitment to transparency is contradicted by its actions. Neal said Lloyd’s expects its members to have robust net-zero ESG plans, but will not ask them to publish those policies. He confirmed that data on insured emissions will be collected at syndicate level, but published only as obscure market wide data. Neal tried to justify the lack of transparency by saying he didn’t want to put additional pressure on Lloyd’s members.
Neal stated many times in the meeting that UK competition law prevents him from mandating marketwide action. Previously, Lloyd’s excuse was that it didn’t have the power to require the implementation of its ESG policy, which was proved false by its own bylaws. Neal now points to competition law as the barrier preventing Lloyd’s from mandating its members stop insuring and investing in specific fossil fuel sectors.
Keenan added, “Neal has no intention of taking marketwide action and is using competition law as his latest excuse. However, it does raise a significant question that must be asked of the UK Competition and Markets Authority regarding whether there is any legal barrier to coordinated industry action to meet climate targets.”
The meeting concluded with Keenan’s challenge for Neal to invite Insure our Future members, climate scientists and impacted communities to meet with Lloyd’s Council and ESG committee, and for Neal to join him in a public debate to clarify and discuss Lloyd’s policies. Neal said he would consider each of these, and appeared to mean it.
Check out what else we're doing now to stop the Aberpergwm coal mine expansion
See our first letter and our second letter 'before action' from lawyers Richard Buxton Solicitors challenging the decisions made around the Aberpergwm coal mine expansion licence.
Under direction by grassroots campaign organisation, Coal Action Network, Barrister Estelle Dehon has sent a letter-before-action to the Welsh Government and the Coal Authority on the grounds that:
Our Barrister’s pre-action letter convincingly puts the power to stop the Aberpergwm colliery extension licence firmly in the hands of Welsh Government Ministers. Now it is up to those Ministers to take their rhetoric and put it into swift, decisive action to stop this climate calamity whilst there is still the opportunity to do so. Our pre-action letter also identifies why The Coal Authority, hosted by BEIS of the UK Government, isn’t bound by the narrow set of criteria it claims to be, and could, for instance, site climate change as a reason to withdraw this licence and reject future coal mining licence applications, becoming an ally to our climate commitments rather than an undermining force.
Coal Action Network tried to avoid legal action, with supporters sending over 4000 emails to Lee Waters of the Welsh Government and Michael Gove of the UK Government, urging them to come to work together and arrive at a common understanding as to which could intervene on the pending licence to extend the Aberpergwm colliery—and then take that action to stop the licence before it’s granted. However, along with our open letter, Ministers ignored thousands of concerned members of the public. As Ministers refuse to respond to the public’s and civil society’s concerns, we must resort to this legal action.
We hope that the Welsh Government and The Coal Authority act swiftly to stop this coal mine, in accordance with the legal grounds identified within the pre-action letter. This may avoid the need for a judicial review. But we cannot allow it to go unchallenged, that every institution and individual involved has shrugged off the responsibility for committing us to the extraction of 70 million tonnes of coal, selling 40 million tonnes of coal, and the release of 1.17 million tonnes of methane and c.100 million tonnes of CO2. This is a terrible climate injustice, it must be stopped, and those responsible must be held to account. The time to draw a line in the sand is now. No new coal mining for any purpose. And the IEA agrees with us (p103).
If we must resort to a judicial review to prevent this coal mine, we intend to crowd-fund it and we hope you’ll share it widely. As well as stopping this coal mine extension, a successful legal challenge will dissuade the other coal companies which have conditional licences from the Coal Authority to attempt new coal mines. We would significantly raise the bar against new coal mines.
