- Citing climate change, Chubb will no longer do business with companies that build or operate coal-fired plants or that generate more than 30% of their revenues from coal-related activities, the Swiss insurance company announced Monday.
- Existing investments and insurance policies will be phased out by 2022 and the policy change is expected to have a minor impact on premium revenues and no impact on investment performance, the company said in a statement.
- The transition toward low-carbon generation that's currently underway in the energy sector reflects not only environmental objectives but also market economics, Richard McMahon Jr., senior vice president of energy supply and finance at the Edison Electric Institute (EEI), told Utility Dive. "We didn't see [Chubb's announcement] as anything out of the ordinary," he said.
Chubb on Monday became the first big U.S. insurer to stop selling insurance policies to coal-fired power plants and coal mines, according to media reports.
More companies are seeing the economic and environmental benefits of renewable energy technology as the U.S. energy sector continues its transition toward low-carbon generation. Chubb, which does most of its business in the U.S., pointed to the effects of climate change as the main reason for its decision.
"Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet," Evan G. Greenberg, chairman and CEO of Chubb, said in a statement. "Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses and citizens alike."
Chubb's policy change and potential similar changes from other companies are not expected to negatively affect U.S. utilities, according to EEI.
"When you look at the companies that maybe have more fossil in their mix right now, they still have interesting forward stories in terms of how they are transitioning their fleets, and what those opportunities are in terms of implementing wind, solar or natural gas. And also sustaining the nuclear fleet, which is a big part of that," McMahon Jr. told Utility Dive.
"The basic idea is that our industry is leading the transformation to the lower carbon energy economy and not being disadvantaged by it," he said.
For EEI, which represents all U.S. investor-owned electric companies, Chubb's announcement is simply a reflection of this movement.
The coal industry said the insurer's decision was disappointing.
"Fossil fuels supply the majority of the world's energy needs and will continue to," Betsy B. Monseu, CEO of the American Coal Council, told Utility Dive in an email. "Any support for a transition to a low-carbon economy must include support for low carbon coal. Investment policies that are broader and more inclusive, rather than narrower and more restrictive, are needed."
Electricity policies and investment objectives should be aligned to replace existing coal plants with high efficiency, low emissions (HELE) coal plants, she added.