3 minute read
Editorial
A ticking stink bomb
Climate protesters laid a sensory assault on Lloyd’s of London in June, setting off a stink bomb outside the main entrance of the world’s oldest insurance marketplace to protest its ongoing support of fossil fuel projects. Two months earlier, the same group of activists, known as Insurance Rebellion, used a tipper truck to dump a large pile of fake coal at Lloyd’s headquarters.
If a literal stink bomb isn’t enough to grab the industry’s attention, how about a stink of a more figurative nature? In what should be a serious wake-up call to the insurance industry, oil and gas giant Exxon Mobil was recently brought to its knees by a tiny activist hedge fund over its climate strategy.
On May 26, a little-known investment firm named Engine No. 1, which holds a stake of just US$50 million in the US-based energy behemoth, staged a successful coup in which it managed to unseat two of Exxon’s board members and replace them with nominees who will pressure the company’s leadership to increase its efforts to combat climate change. The successful climate coup, supported by
British insurer Legal & General Group, which has a US$1.5 billion stake in Exxon, should serve as a stark warning for other public companies, including insurers.
Stink bombs aside, the pressure is rising for insurance leaders to ‘walk the walk’ with energy transition. Simply publishing grand statements about reaching net zero carbon by 2050 will not satisfy the demands of climate-conscious investors. They are demanding – through dissident boardroom politics, if necessary – that insurers retract any ongoing support for the fossil fuel industry and cease insuring new oil and gas projects.
This puts some insurers in a tight bind. Many have legacy contracts and investments that are perhaps contrary to current demands around energy transition and climate change. It can be challenging to wind down portfolios and shift business priorities at a speed that matches the ever-growing wave of climate change realization around the world. But the one thing insurers cannot do is nothing. When it comes to climate change, actions really do speak louder than words.
The team at Insurance Business Canada www.insurancebusiness.ca
EDITORIAL
Managing Editor Paul Lucas Senior Editor Bethan Moorcraft Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Pete Miller, Gabriel Olano, Jonathan Russell, Ryan Smith, Ksenia Stepanova, Mia Wallace Copy Editor Clare Alexander
CONTRIBUTORS
Gary Koslov, Dermot Crowley, Aytekin Tank
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Designer Joenel Salvador Production Coordinators Kat Guzman, Loiza Razon Customer Success Coordinator Bernz Jalandoni
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