Chubb announced last week that, effectively immediately, it will restrict underwriting oil and gas extraction based on conservation and emissions criteria.
The world’s biggest property and casualty insurer, with offices in Whitehouse Station, said from now on it will provide coverage for oil and gas extraction projects only to clients that proved they had plans to reduce methane emissions.
Methane emissions, a byproduct of oil and gas production, are among the most damaging greenhouse gases for climate change.
The new criteria will be immediately effective, Chubb said, adding that customers would have some time “to develop an action plan based on their individual risk characteristics.”
According to its news release, Chubb said it will also not insure oil and gas extraction projects that are located in specific protected areas or do not have evidence-based plans to manage methane emissions.
“The methane-related underwriting criteria that Chubb has adopted — the first of their kind in our industry — are focused on the balance between the need to transition to a low-carbon economy and society’s need for energy security,” Evan Greenberg, chairman and CEO of Chubb, said. “As a company, we are accelerating and expanding our climate-related initiatives without committing to sweeping net-zero pledges for which, in our judgment, there is not a viable path to achieve.
“We will continue to pursue in earnest a responsible, realistic and science-based approach. Implementing these underwriting criteria encourages oil and gas producers to adopt technologies to reduce GHG emissions in extraction. We know that many of our clients in the industry are already committed to limiting methane emissions and we will work to expand those commitments.
“Our policy on not insuring energy projects in protected areas also reflects our approach to setting clear guidelines to sustain biodiversity and protect nature. Taken together, our new underwriting criteria, along with our other substantive actions, are grounded in our commitment to lead the industry in the transition while balancing the need for energy security.”
In 2019, Chubb was the first insurer with significant U.S. operations to limit coal-related underwriting and investment, a policy later extended to oil sands projects underwriting. More recently, Chubb launched a new climate business unit, Chubb Climate+, which will provide a full spectrum of insurance products and services to businesses engaged in developing or employing new technologies and processes that support the transition to a low-carbon economy. The business unit also provides risk management and resiliency services to help those managing the impact of climate change. In January, the company appointed a new global climate officer to provide insights and leadership for Chubb’s climate activities.