Chubb pledges methane reductions with new underwriting criteria
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Chubb has placed new restrictions in its underwriting criteria for oil and gas extraction projects in an attempt to reduce methane emissions, a by-product of oil and gas production that is “among the most severe greenhouse gases”.
In addition, the US insurer will no longer insure oil and gas projects in government-protected conservation areas “that do not allow for sustainable use”.
Chief executive and chairman Evan G. Greenberg said implementing the underwriting criteria encourages oil and gas producers to adopt technologies to reduce greenhouse gas emissions in extraction.
"The methane-related underwriting criteria that Chubb has adopted – the first of their kind in our industry – are focussed on the balance between the need to transition to a low-carbon economy and society's need for energy security," he said.
What are the key provisions for Chubb’s underwriting standards?
For methane emissions, Chubb will continue to insure clients that implement evidence-based plans to manage methane emissions including, at a minimum, having in place programmes for leak detection and repair and the elimination of non-emergency venting.
It said clients must adopt one or more measures proven to reduce emissions from flaring, adding: “These criteria will commence immediately and customers will have a set period of time to develop an action plan based on their individual risk characteristics.”
Chubb will also create a customer resource centre to support oil and gas insureds in identifying and adopting methane emissions reduction technologies.
The property and casualty insurer will not underwrite oil and gas extraction projects in protected areas designated by state, provincial or national governments. These locations, covered by the International Union for the Conservation of Nature management categories I-V in the World Database on Protected Areas, include nature reserves, wilderness areas, national parks and monuments, habitat or species management areas and protected landscapes and seascapes.
"Our policy on not insuring energy projects in protected areas also reflects our approach to setting clear guidelines to sustain biodiversity and protect nature," said Greenberg.
What has Chubb done so far to combat climate change?
Like several US insurers, Chubb has long been criticised by activists for lagging behind their European counterparts in limiting its support for fossil fuels.
According to the 2022 scorecard produced annually by climate campaigner Insure Our Future, Chubb was ranked 22nd in underwriting fossil fuels. Specifically for oil and gas underwriting, the company was ranked 19th.
In January, Chubb launched a new climate business unit, Chubb Climate+, to provide a range of insurance products and services to businesses involved in new technologies and processes that support the transition to a low-carbon economy.
The insurer has also appointed Margaret Peloso as global climate officer, a newly created role to provide insights and leadership for Chubb's climate activities.
In July 2019, the P&C firm announced restrictions for coal underwriting and investments, a policy later extended to oil sands projects underwriting.
Will today’s announcement improve Chubb’s ranking in the scorecard and change how activists view the insurer in the future?