US insurance giant becomes latest firm to tighten investment policies in bid to deliver on its net zero emission goals

Insurance giant AIG has this week announced a commitment to achieving a net zero emission underwriting and investment portfolio by 2050 at the latest, alongside moves to restrict its support for the most carbon intensive infrastructure assets.

The company last year announced a target to deliver net zero emissions across its operations by mid-century, but it has today become the latest in a string of major financial firms to extend the target to cover its portfolios.

It also pledged to source 100 per cent renewable energy for its operations by 2030 or sooner and announced it would ensure its emissions targets are in line with science-based recommendations.

And in support of the new targets the company said that “with immediate effect” it would “no longer invest in or provide insurance for construction of any new coal-fired power plants, thermal coal mines or oil sands”.

Similarly, it said it will no longer invest in or underwrite new operation insurance risks of coal-fired power plants, thermal coal mines or oil sands for those clients that derive 30 per cent or more of their revenues from these industries, or generate more than 30 per cent of their energy production from coal.

And it said it would “phase out” the underwriting of all existing operation insurance risks and cease new investments in those clients that derive 30 per cent or more of their revenues from coal-fired power, thermal coal mines or oil sands, or generate more than 30 per cent of their energy production from coal by 2030 at the latest.

Finally, it confirmed that with immediate effect it would not invest in or provide insurance cover for any new Arctic energy exploration activities.

“Leading change in a changing world requires being a company of action – and, as a market leader, AIG is committed to setting the standard with our actions,” said Peter Zaffino, chairman and CEO at AIG. “We believe today’s ESG commitments are an important step forward for AIG, the clients we serve and the global communities where we live and work. AIG is focused on the realities of climate change. The data about climate change is unambiguous and we believe that AIG can be a catalyst for positive change as it relates to sustainability advancements and renewable energy expansion.”

His comments were echoed by Constance Hunter, executive vice president and global head of strategy and ESG at the company, who said AIG was “committed to a transparent journey toward sustainability advancement”.

“We are having constructive discussions with all our stakeholders on this important issue and look forward to reporting progress,” she said. “We will work together with our clients and distribution partners, in particular, to ensure an ongoing transition to a net zero future and provide guidance on feasible solutions designed to help manage climate-related risks.”

The new commitments were broadly welcomed by campaigners who said the move further highlighted the challenges the world’s most carbon intensive projects are facing securing insurance cover and access to capital.

“As one of the last major insurers without restrictions on coal insurance, AIG’s new commitments to reduce underwriting for coal, tar sands oil, and Arctic oil and gas are a major step forward for people and the planet,” said Hannah Saggau, insurance campaigner with Public Citizen. “AIG has vaulted itself from a laggard in the industry to a leader in the US, and we look forward to working with it to meet and improve on these commitments.”

Want to find out more about how the net zero transition will impact your business? You can now sign up to attend the virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.

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