A win for environmentalists: Talanx drops coverage for Trans Mountain pipeline
Talanx's exit prompts other carriers to follow as advocates target insurers to discontinue coverage for fossil fuels.
After a year of sustained pressure by environmental groups, one insurer has backed out of its policy coverage of Canada’s controversial Trans Mountain pipeline.
Environmental advocacy group Stand.earth applauded German insurer Talanx last week for dropping its coverage of the oil sands project. The move demonstrates a commitment made to a new policy adopted by the company earlier this year in which Talanx discontinued insurance coverages for particular coal companies and tar sands projects.
Currently, Trans Mountain’s Certificate of Insurance lists 11 companies that are collectively providing $508 million of liability insurance over a 12-month period ending August 31, 2020.
All 11 carriers have been targeted by environmentalist groups to divest and discontinue their policy coverages for the project, as has Marsh, the broker for the pipeline.
In rough order of coverage totals and significance, the 10 other insurance companies providing coverage for Trans Mountain are: Zurich, Lloyd’s, Liberty Mutual, Chubb, AIG, WR Berkley, Starr, Stewart Specialty Risk Underwriting, Energy Insurance Mutual and Munich Re subsidiary Temple Insurance. These coverages expire after August 31, 2020.
Talanx said that it pulled out of the project in 2019, and the current insurance certificate wrongly named its subsidiary HDI Global SE as providing $85 million of cover jointly with other insurers.
Outlining the policy, a statement from Talanx reads, “As a matter of principle, Talanx no longer invests in companies that derive more than 25% of their revenue or generate more than 25% of their power from coal. In addition, oil sands have been added to the list of exclusion criteria for both investments and underwriting.”
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Putting pressure on one major carrier on the project, Stand.earth suggested Munich Re could also soon drop Trans Mountain, as the project conflicts with the company’s new policy on tar sands The policy, which was annouced earlier this year, ends any future coverage of tar sands extraction projects and dedicated tar sands infrastructure, including pipelines.
The Munich Re policy covers both investments and insurance, ending insurance coverage for the extraction of oil sands or related dedicated infrastructure on a single risk basis and ending any investment in companies that generate >10% of their revenue from oil sands extraction.
Munich Re’s Canadian subsidiary Temple Insurance was Trans Mountain’s third-biggest insurer in 2019, providing $250 million of cover, according to the Rainforest Action Network (RAN).
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The expansion plans would have the Trans Mountain pipeline running from Alberta’s oil sands to the shores of Vancouver, BC. Stand.earth contests that if this pipeline were to go into operation, emissions would increase drastically — “roughly the same total emissions as putting 21 million new cars on the road.”
The group calls the pipeline “a litmus test for insurers’ commitments to the Paris Agreement,” which aims to limit global warming as close to 1.5ºC as possible.
Dr. Kirsten Zickfeld, lead author of the IPCC’s report “Global Warming of 1.5ºC,” has already expressed that Trans Mountain, along with other oil industry and infrastructure expansion projects, are not compatible with this target.
Stand.earth argue the existing Trans Mountain pipeline is already a major environmental and public health hazard with a long history of disastrous spills. According to the group, last week, 50,000 gallons of crude oil spilled from a pump station located above an aquifer that supplies Indigenous people of the Sumas First Nation with drinking water.
Land rights violations fuel a decade of legal battles
This latest spill demonstrates the pipeline’s impact on Indigenous lands, Stand.earth says.
According to the group, the expansion of Trans Mountain has been delayed and argued against for over a decade by Indigenous communities, including the Tsleil-Waututh Nation, Squamish Nation and Coldwater Indian Band, as plans for expansion tear through their sacred lands and violate their land rights.
“The companies insuring Trans Mountain are complicit in Indigenous rights violations,” said Kukpi7 Judy Wilson, secretary-treasurer of the Union of British Columbia Indian Chiefs and chief of the Neskonlith Indian Band.
“Trans Mountain put in the existing line without the consent of impacted First Nations, and we have said no countless times to the proposed expansion. As Indigenous peoples, we are stewards of our lands and waters,” said Wilson. “We have jurisdiction over activities that happen in our territories, and we don’t want them ruined by oil spills.”
Summarizing the arguments against the pipeline expansion, Elana Sulakshana, energy finance campaigner at Rainforest Action Network, said in a statement, “With their new tar sands policies, Talanx and Munich Re recognize the major threats that Trans Mountain and the entire oil sands sector pose to Indigenous land rights, sacred waterways, and a safe climate future.”
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