UK insurer accused of undermining international efforts to fight climate change
UK insurer Aviva is the second-biggest investor in the Polish coal industry, the most polluting in Europe, according to a report that looks at insurance firms’ involvement in the sector.
Aviva is among a number of major European insurers that are backing the expansion of Poland’s coal industry, undermining international efforts to battle climate change, according to research from Unfriend Coal, a global network of organisations including Greenpeace Switzerland, 350.org and the UK Tar Sands Network.
Aviva has invested £372.7m in Polish coal, more than any other insurance company apart from the Dutch firm Nationale Nederlanden, the report found.
Poland’s coal industry is the second biggest in Europe, after Germany. Pollution from Polish coal is estimated to cause 5,830 premature deaths across Europeevery year, Unfriend Coal said.
The UN recently called for a stop to new coal power plants and an accelerated phase-out of existing ones. But Polish companies are planning to build power plants able to generate more than 10 gigawatts and open new mines holding more than 3.2bn tonnes of lignite, the dirtiest form of coal.
Aviva’s investments are held through its Polish pension fund, OFE Aviva BZ WBK. The fund increased its holdings in Polish coal companies by more than £45m between 2016 and 2017.
It has a 2.3% stake in the country’s largest power company PGE, which operates two of Europe’s most polluting coal plants at Bełchatów and Turów and plans to build new coal plants generating more than 5.2GW.
Peter Bosshard, Unfriend Coal coordinator, said: “Unlike all other insurers which are taking action on coal, Aviva decided to focus on engagement rather than on divestment, and have only divested from very few companies if engagement was completely unproductive.”
Aviva said it invested more than £525m in low-carbon projects such as renewable windfarms and solar energy last year. It added that it engaged with companies that derive more than 30% of revenue from coal to improve their business practices and will divest “where we do not see sufficient movement to transition away from coal”.
“In Poland, local pension companies, including Aviva, manage customers’ assets under a strict regulatory regime and are not able to influence the investment strategy for these. The investment guidelines focus on domestic equity where the energy industry is the second largest after the banking sector,” it said.
European insurers have invested more than £1.15bn in Polish coal companies and have signed at least 21 contracts insuring coal plants since 2013, according to Unfriend Coal.
Europe’s biggest insurer, Allianz, is leading a consortium underwriting the biggest coal power plant under construction in Europe at Opole near Katowice, a PGE project, which is due to start operating next year. The consortium includes Italy’s Generali, Germany’s Munich Re and the Polish insurer PZU.
Allianz said: “We will continue to insure utilities and mining companies when they show an adequate sustainability performance or suitable risk mitigation strategies.”
