Zurich stops underwriting new oil and gas projects

Zurich Insurance will stop underwriting new oil and gas projects as part of its climate plan, arguing that new exploration and developments “are not required for the transition”.

The news was covered initially by Bloomberg, and confirmed yesterday by Zurich Chief Sustainability Officer Linda Freiner, who said the move is part of the company’s “broader climate transition journey” and aligns with the International Energy Agency (IEA) Net Zero Emissions by 2050 scenario.

“At Zurich Insurance, we understand that every customer is unique when it comes to their climate transition journeys. That's why customer engagement remains our priority, as it allows us to gain a deeper understanding of their unique challenges and needs. As we move forward, we're accelerating our investment in sustainable solutions and capabilities. This is not just about doing what's right for the planet, but also about innovating for the good of our customers and society,” she added.

Zurich sustainability levers

According to Bloomberg, the new policy also involves requiring high-emitting customers to reduce their carbon footprint, and “cracking down” on metallurgical coal mining expansion – with more details due to be announced as part of the publication of Zurich’s climate transition plan later this year.

Speaking to CSO Futures in February, Freiner explained her and her team’s role in enabling sustainability-aligned decision-making such as this one: “We have regular performance management conversations to make sure that we advance on the ambitions that we set. Similarly, on the underwriting side, we're looking at what material levers we have; I'm kind of the sparring partner to make sure that we move along [and I] keep them accountable against the KPIs that we've set. 

“So it's very much a relationship of ‘how do we move things forward? Are there any roadblocks? Can we work with others?’ Being an enabler making sure we progress.”

Zurich fossil fuel underwriting

Zurich has set a 2050 target to achieve net-zero emissions across its underwriting and investment portfolio, but last year, 7% of its total commercial premiums came from fossil fuel clients. 

In 2022, the Swiss insurance company was the world’s sixth largest fossil fuel underwriter and one of just two European insurers that continued to underwrite new oil and gas extraction projects, according to the 2023 Scorecard on Insurance, Fossil Fuels and the Climate Emergency developed by NGO Insure our Future.

Zurich was also the second insurer to quit the Net Zero Insurers Alliance (NZIA) last April following anti-ESG campaigns in the US. Despite this, the company scored 11th out of 30 insurance firms assessed in the scorecard.

According to Insure our Future, no insurer is fully aligned with the 1.5°C Paris target and overall, despite having introduced certain fossil fuel underwriting restrictions.