‘Big news’ for climate as global insurance giant shifts away from fossil fuels

Otogidemon, CC BY-SA 3.0, via Wikimedia Commons
30 St Mary Axe. Also known as the Swiss Re building, or Gherkin. Source: Otogidemon, CC BY-SA 3.0, via Wikimedia Commons.

The new policy by Swiss Re “is not perfect yet,” said one campaigner, but the world’s second-largest reinsurer “is headed in the right direction.”

By Kenny Stancil, Creative Commons (CC BY-NC-ND 3.0).

After Swiss Re, the world’s second-largest reinsurer, announced Thursday that it is moving to end coverage for most new oil and gas projects, climate justice campaigners who have long pushed for the insurance industry to shift away from fossil fuels offered cautious praise.

“Swiss Re is one of the world’s ultimate risk managers and the policy which it published today sends a strong message to fossil fuel companies, investors, and governments: oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade,” Peter Bosshard, global coordinator of Insure Our Future, said in a statement.

According to Reuters:

In its annual sustainability report on Thursday, Swiss Re said it would no longer insure projects that get the go-ahead from their parent company from 2022, unless the company has an independently verified, science-based plan to reach net-zero emissions.

By 2025, Swiss Re said it wanted half of its overall oil and gas premiums to come from companies aligned with such a net-zero by 2050 plan, and by 2030 all its clients in the sector should have done so.

Also, from 2022, the company said it will no longer insure companies or projects with more than 10% of their production in the Arctic, apart from Norwegian producers.

On the issue of treaty reinsurance, whereby it insures bundles of risk in a job lot, Swiss Re said it expected to finalize a policy for the oil and gas sector in 2023.

“By taking steps to stop insuring new oil and gas projects and companies that won’t aim at aligning their activities with climate science by 2030, Swiss Re is headed in the right direction,” said Reclaim Finance director Lucie Pinson.

“The policy is not perfect yet,” she added, “and we encourage its peers to build on it to fully align with a realistic 1.5°C scenario.”

The International Energy Agency (IEA) said last May that there is “no need for investment in new fossil fuel supply” if the world is to achieve a net-zero energy system by 2050 en route to meeting the Paris agreement’s more ambitious global warming target.

Swiss Re, said Pinson, should respond to the IEA’s landmark report by “drawing a red line against fossil fuel expansion and excluding both projects and companies that cross that line well before 2025.”

Sharing a detailed Twitter thread by Bosshard, Oil Change International celebrated Swiss Re’s move. Becoming the first major oil and gas insurer to deny coverage for most new fossil fuel projects is “big news,” said the group.

Arguing that “ending support for oil and gas projects is gaining real momentum,” 350.org also praised Insure Our Future and encouraged its campaigners to “keep up the good work.”

According to Bosshard, Swiss Re’s phase-out commitment represents “a first for the insurance industry” because it “not only applies to the up and midstream sectors, but also to downstream companies (oil refineries, gas utilities, petrochemical plants etc.) without credible net-zero plans.”

However, he continued, “the new policy includes some important gaps and contingencies.”

“It will not cover new production projects which oil companies move forward as part of their ongoing operations,” said Bosshard. “It also exempts Norway from its definition of Arctic oil. The IEA doesn’t make any such exemptions.”

“Most importantly, the policy hinges on the development of a credible oil and gas framework by the Science Based Targets initiative [SBTi], by which oil companies’ net-zero plans will be measured,” he added. “It’s crucial that the SBTi framework reflect the findings” of the IEA and the United Nations.

Swiss Re’s new policy follows similar policies adopted last week by Hannover Re and Mapfre, said Bosshard, who pointed out that “these three companies cover 21% of the global reinsurance market.”

“Now, the Insure Our Future campaign calls on Munich Re, Lloyd’s, and SCOR, which together account for 26% of the global reinsurance market, to make commitments which build on Swiss Re’s approach by the time of their annual general meetings,” said Bosshard.

“We’ll be watching,” he added.

Amazon deforestation hit record high in February—up 62% from 2021

This absurd increase shows the lack of policies to combat deforestation and environmental crimes in the Amazon, driven by the current administration. … The destruction just isn’t stopping.

—Romulo Batista, Greenpeace Brazil

By Jenna McGuire, Common Dreams (CC BY-NC-ND 3.0).

Deforestation in the Brazilian Amazon reached a record high for the month of February, jumping by nearly two-thirds over last February’s level, according to official data released Friday.

Satellite images released by the Brazilian space agency INPE’s DETER monitoring program show 199 square kilometers (77 square miles) of the Amazon rainforest was lost to deforestation last month—the highest rate recorded in February since the agency began keeping records in 2015 and a 62% increase from last year during the same month.

Environmentalists find the data particularly alarming since February is considered the rainy season in the Amazon and generally sees the lowest rates of deforestation throughout the year.

As Indigenous communities and global environmentalists have been sounding the alarm on the imperiled rainforest, deforestation has skyrocketed under Brazil’s right-wing President Jair Bolsonaro. While the Amazon covers land in nine countries, approximately 60% of the forest lies in Brazil, which has reached its highest level of deforestation in more than a decade.

“This absurd increase shows the lack of policies to combat deforestation and environmental crimes in the Amazon, driven by the current administration. The destruction just isn’t stopping,” said Romulo Batista of Greenpeace Brazil in a statement.

Deforestation is predominantly caused by animal agriculture, soy production, logging, mining, and major construction, and has greatly impacted the nearly one million Indigenous people from over 300 tribes who live in the Brazilian Amazon.

“We are going to be eating the rainforest in our burgers,” Holly Gibbs, a land use scientist at the University of Wisconsin at Madison, told the Washington Post. “This is our moment as Americans to step forward and leverage some pressure to save the world, by helping to save the Amazon, which is critically important for the future of our planet.”

Research published this week in the journal Nature Climate Change found that the world’s largest rainforest was quickly reaching its “tipping point” and that the Amazon “has been losing resilience since the early 2000s, risking dieback with profound implications for biodiversity, carbon storage, and climate change at a global scale.”

Ecuador’s top court rules for stronger land rights for Indigenous communities

Indigenous leader and CONAIE President Leonidas Iza and other Indigenous leaders hold a press conference outside the Constitutional Court before filing their lawsuit against Ecuador’s President Guillermo Lasso, October 18th 2021. Photo Mitch Anderson / Amazon Frontlines
Indigenous leader and CONAIE President Leonidas Iza and other Indigenous leaders hold a press conference outside the Constitutional Court before filing their lawsuit against Ecuador’s President Guillermo Lasso, October 18th 2021. Photo Mitch Anderson / Amazon Frontlines

By Kimberley Brown, Mongabay (CC BY-ND 4.0).

QUITO, Ecuador — Indigenous communities across Ecuador celebrated over the weekend after a historic ruling by the country’s highest court declaring that Indigenous communities have more autonomy over their territory and a much stronger say over extractive projects affecting their lands.

“This has been a very big news, very important for the community, for all of us who have been on this path,” said Nixon Andy, from the Indigenous Kofan community of Sinangoe in Ecuador’s northern Amazon rainforest.

Ecuador’s Constitutional Court, the country’s highest court, made the ruling on Feb. 4 after reviewing Sinangoe’s 2018 lawsuit, in which the community sued three government ministries for selling mining concessions on their territory without consultation. Provincial judges at the time ruled in favor of the community and the rights of nature, overturning 52 mining concessions.

But last week, the Constitutional Court took this ruling one step further. After reviewing the evidence and traveling to Sinangoe to hold a historic hearing in Indigenous territory last November, the judges found there was a violation of a number of the community’s rights. This includes their right to be consulted before extractive projects are developed on their land.

As a result, the court ruled that the state has an obligation to ensure that communities undergo a consultation process before any extractive activity is planned on or near their territory. This process must also be “clear and accessible” for the whole community, and be carried out with the purpose of “obtaining consent or reaching an agreement with” the communities, according to the 39-page ruling.

Lina Maria Espinosa, a senior attorney with Amazon Frontlines, the environmental NGO that has been supporting Sinangoe, said the ruling will have an immediate impact on any oil or mining activity in any Indigenous territory in the country, as they must now undergo a consultation process with communities and obtain the community’s consent.  

“The sentence seems to be an advance in the recognition of the rights of Indigenous peoples to consent [to projects affecting their land], which is the ultimate purpose of the consultation,” Espinosa wrote to Mongabay in a text message.

“This goal must be pursued by the state ALWAYS,” she wrote.

Absent and faulty consultation process

According to Ecuador’s Constitution, Indigenous communities must be consulted before any oil, mining or other extractive projects begin on or near their territory. This is upheld internationally, under Convention 169 of the International Labour Organization, which guarantees Indigenous communities access to free, prior and informed consent (FPIC).

Despite these legal mechanisms, prior consultation has been a major point of conflict in the small South American nation. Many Indigenous communities say they were either never consulted before oil or mining projects were developed on their land, such as the community of Sinangoe, or that the process was faulty.

In 2019, Ecuador’s Waorani sued the state for conducting a flawed consultation process with the community in 2012, which they said was based on lies, misinformation, and a lack of translation necessary for elders who don’t speak Spanish. The court ruled in favor of the community, calling the process fraudulent. This ruling put into doubt all other consultations the government had conducted with communities across the Amazon in 2012, a process that led to the division of the rainforest into oil blocks to be sold to international investors. 

The A’i Kofan guardia of Sinangoe finds heavy gold-mining machinery along the Aguarico river in their lands, January 2018, Ecuadorian Amazon. Photo Jerónimo Zúñiga / Amazon Frontlines
The A’i Kofan guardia of Sinangoe finds heavy gold-mining machinery along the Aguarico river in their lands, January 2018, Ecuadorian Amazon. Photo Jerónimo Zúñiga / Amazon Frontlines

Andres Tapia, communications director with Ecuador’s Amazon Indigenous federation, CONFENIAE, said the consultation process had been reduced to an “administrative process.”

“They complied with the requirement to say that [communities] had been consulted, when in reality there was no real relevant consultation process,” Tapia told Mongabay.

The Constitutional Court’s ruling is “historic,” Tapia said, as it “provides a guideline for the right to consent, whereby the community has the final decision on whether or not to allow any extractive activity,” he added.

President Guillermo Lasso has not yet commented on the ruling, as he is currently in China trying to renegotiate his country’s massive debt with Beijing. The ruling could hamper his administration’s plans to double both oil and mining across the country, in order to address Ecuador’s economic crisis that has seen unemployment and poverty spike during the COVID-19 pandemic. Oil and mining account for a combined more than 8% of Ecuador’s GDP.

The Constitutional Court ruling leaves the door open for the government to advance with certain extractive projects without consent from the community in “exceptional circumstances.” But, it stipulates, these initiatives can never “generate disproportionate sacrifice to the collective rights of communities and nature.”

Waorani women in their ancestral territory, Pastaza, Ecuadorian Amazon. Photo Mitch Anderson / Amazon Frontlines
Waorani women in their ancestral territory, Pastaza, Ecuadorian Amazon. Photo Mitch Anderson / Amazon Frontlines

There are 14 Indigenous nations in Ecuador, many of them living in areas rich in oil and mineral deposits. This is particularly true in the Ecuadoran Amazon, where the vast majority of the country’s crude oil reserves are located. At the same time, 70% of the region is also designated Indigenous territory, CONFENIAE said. Scientists also say that an intact Amazon is essential to tackling climate change.

Of the nine Constitutional Court judges hearing the recent case, five ruled in favor of this final ruling, three ruled against, and one abstained.

“The Constitutional Court ratified that the state has to listen to us, so this sets a very important precedent for us, and for the whole Indigenous world, because our voices are not always listened to,” Andy told Mongabay.