WASHINGTON (Reuters) – A coalition of 32 environmental and indigenous groups on Thursday urged insurers to stop underwriting the Trans Mountain pipeline to pressure Canada to cancel its plan to expand the project which carries crude from Alberta’s oil sands to British Columbia’s Pacific coast.
FILE PHOTO: The Westridge Marine Terminal, the terminus of the Trans Mountain Pipeline, is seen in an aerial photo over Burrard Inlet in Burnaby, British Columbia, Canada June 29, 2019. Picture taken June 29, 2019. REUTERS/Jason Redmond
Self-insurance by the government for the expansion would cost taxpayers $1.1 billion, the groups said. Pressure is growing for financial companies to pull back from insuring and investing in polluting industries like coal and oil as part of an effort to combat climate change.
The coalition sent a letter to 27 companies registered to insure the pipeline, including Munich RE [MUVGGR.UL], Talanx and Zurich Insurance Group AG, asking them to drop their coverage before Aug. 31, the deadline for Canada to renew its liability insurance.
The groups said they hope the pressure “will show the Canadian government that the expansion is uninsurable.”
The Canadian government bought the pipeline from Kinder Morgan to help solve crude transportation bottlenecks for landlocked Albertan crude. Environmental activists say the project will undermine Canada’s commitment to reduce greenhouse gas emissions 70% below 2005 levels by 2030 under the Paris climate agreement.
“Providing insurance services to a project that would allow exponential growth of the oil sands, effectively removing any remaining chance of Canada staying within the goals of the Paris climate change agreement, would critically undermine the continued viability of your industry,” the groups told the insurers in the joint letter.
The activist groups include Stand.Earth, the Union of BC Indian Chiefs, German NGO Urgewald, the Rainforest Action Network and Greenpeace International.
Last month Chubb Ltd became the first U.S. insurer to say it would no longer sell policies to or invest in companies that make more than 30% of their revenue from coal mining. This follows the lead of some of Europe’s biggest insurers and financial institutions, including Allianz Finance Corp [ALVGLZ.UL], AXA [AXAFD.UL], Lloyds Banking Group and Zurich Insurance Group , which have placed restrictions on coal underwriting.
The groups said they would ramp up pressure on Zurich, which told the campaigners in a letter last week it would continue insuring the Trans Mountain Pipeline while it discusses with the Canadian government how to meet its Paris climate agreement targets with the pipeline in place.
In June, Zurich had pledged to divest from the oil sands industry.
“By renewing coverage of the Trans Mountain Pipeline, Zurich betrays its own commitments,” said Lucie Pinson, of the Unfriend Coal campaign in a statement on Thursday.
Reporting by Valerie Volcovici; Editing by Richard Chang