Canadian Underwriter

Has Russia-Ukraine hindered insurers’ ESG plans?

February 13, 2023   by Alyssa DiSabatino

Oil drills in a row on the left and right, in the foreground of a sunset.

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Insurers with ESG plans are still sticking to their guns to stop backing fossil fuels and thermal coal, even as geopolitical events like Russia’s Ukraine invasion put strain on the international energy sector, an industry expert told delegates at CatIQ Connect. 

Before Russia invaded Ukraine almost a year ago, many insurers had begun restricting coverage for high-polluting clients in sectors such as energy, oil and gas.

“Over the long term, it’s fundamental that the world moves away from thermal coal, so we’re absolutely sticking to our guns,” said Gillian Rutherford-Liske, head of reinsurance sustainability at Swiss Re during a fireside chat on Sustainability, Adaptation, and the Financial Sector.

While this is holds true for Swiss Re, Rutherford-Liske says other companies are doing the same. Swiss Re in 2021 committed to net-zero greenhouse gas emissions by 2050 for investments and liabilities, and by 2030 for its own operations.

Russia announced Friday it will cut oil production by 500,000 barrels per day next month after Western countries capped the price of its crude oil over its invasion of Ukraine, the Associated Press reports.

Rutherford-Liske made her comments when asked by an audience member whether insurance or reinsurance companies were continuing to follow suit with their ESG plans.

The delegate asked whether insurers have taken the same approach as some European countries, like Germany, who have reactivated coal mines amid fears of gas shortages from Russia “[turning] off the taps” to the rest of Europe.

“We’re sticking to our guns and our approach,” said Rutherford-Liske.

Since Russia’s invasion of Ukraine, many countries have pledged to end or restrict their oil and gas imports to curtail Moscow’s revenues and hinder its war effort.

The European Union this month has also taken a big step toward cutting its energy ties with Russia by banning Russian refined oil products like diesel fuel and imposing a price cap on sales to non-Western countries, according to AP.

In 2021, more than half of all Russia’s crude oil exports went to countries in Europe, the BBC reports. But in 2022, UK imports of oil from Russia fell sharply and other European countries have cut back too. But some countries, such as the Slovak Republic and Hungary, have remained reliant on Russian imports.

Another delegate asked whether insurers were abdicating themselves from the responsibility “to help [people] heat their homes.”

“Our approach and the approach of a number of insurers and reinsurers is a phased approach,” said Rutherford-Liske. “So, it’s not switching off support from one day to the next…it’s supporting transition.

“There are measures, and we stand by the measures, to [limit global warming] but there is going to have to be some stepping away from supporting fossil fuel production and extraction. But again, it’s phased, and this is such an important point.

“Phasing step by step—that’s how to do it successfully. But I don’t think backtracking on those commitments is going to help our climate goals and where we need to get.”


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