The end of 2017 saw a rapid escalation of big divestment announcements, including from global insurer Axa. 2018 brings more opportunity – so long as campaigning prioritises the voices of those most impacted by climate change.
Last week AXA announced its sell off of €700m of tar sands investments from its balance sheets, covering 25 tar sands companies and 3 major pipelines projects. Thomas Buberl, the company’s chief executive, called the projects “not sustainable and therefore also not insurable.”
This was a significant win for activists like the UK Tar Sands Network and the Indigenous Environmental Network, who have been calling on financial institutions to end investments in the tar sands projects and pipelines since 2009, and who have most recently taken their campaigning efforts to the insurance industry.
The AXA decision comes just weeks after BNP Paribas broke the news that it will no longer finance new shale or tar sands projects, nor work with companies that mainly focus on those resources. Last Friday, Norway’s largest life insurer, KLP announced that it would exclude from its portfolio any firms that derive 30 percent or more of revenues from the extraction of tar sands. In the same week the World Bank announced it would cease financing upstream oil and gas after 2019.
It’s welcome news. Based on the financial risks, climate impacts and indigenous rights violations, we have seen a significant shift in financial institutions backing fossil fuels. The Bank of England now recognizes the monetary risks associated with climate change and is advising the central banks and governments to get out of highly polluting fuels due to the pending carbon bubble and the bad business associated with ‘extreme’ energy extraction. As a result BP, Shell, Exxon and others have pulled out of major tar sands projects and pipelines.
And now the insurance industry is beginning to act more meaningfully. As early as the 1970s, the insurance industry acknowledged the risk of climate change and the need for the sector to take meaningful action. Insurers have already seen the costs of climate related catastrophes and extreme weather events skyrocket, compelling them to be among some of the first movers divesting from coal and also develop policies to stop the underwriting of new fossil fuel projects. But they have massive holdings in fossil fuels. And so they need public pressure to push them to divest.
So despite last week’s news, we must be careful not to pop those champagne corks too fast. Significant action and commitment has yet to be seen by Asian and American insurers. Moreover, regenerative steps need to be taken to ensure that the communities whose livelihoods depend on fossil fuels benefit from the transition to the clean energy economy. Simply put, who will be responsible for the massive clean-ups of stranded projects and direct the green energy transition?
Activists say “no thanks” to greenwash
Indigenous Climate Action’s bold stance on Aviva points the way to a breakthrough on this front.
The Canadian-based Indigenous Climate Action (ICA) group is led by Eriel Deranger, one of the foremost leaders driving the discussion about divestment and just transition. ICA is a new organisation that brings indigenous voices and solutions to the climate movement.
ICA’s groundbreaking work caught the eye of the Aviva Community Fund who awarded them a $150,000.00 cash prize in early December.
But ICA found out that Aviva plc – Aviva Canada’s parent company – held major passive investments (over half a billion USD) in corporations operating in Alberta’s tar sands, including Teck Resource Ltd (Frontier Open pit mine), Encana, Exxon, Imperial, Suncor, Chevron, Cenovus, Kinder Morgan (TransMountain pipeline), TransCanada (Keystone XL pipeline), and Enbridge (Line 3 pipeline).
So ICA had only one option, to reject the prize.
“Aviva invests in projects that are in violation of international human rights and Indigenous rights standards… Aviva needs to ensure they are on the right side of history, and to do that, they must divest from projects that violate our rights and threaten our survival,” Spokesperson Kanahus Manuel commented.
The Canadian government has done little to recognise indigenous land titles. Tar sands expansion continues at an alarming rate, with even more pipelines being approved. We cannot rely on Prime Minister Trudeau’s support to join the climate action force anytime soon.
Odd as it may seem, ICA’s rejection of the 150K award has opened an unlikely opportunity – to have a meaningful conversation with Aviva.
“ICA turning down the Aviva award drives home the urgency of the financial industry cutting ties with extreme fossil fuels. ICA’s bold stand should prompt insurers, investors and banks to drop tar sands and coal across the board and ensure their policies and practices fully respect Indigenous rights,” said Ruth Breech, Senior Climate and Energy Campaigner, Rainforest Action Network.
Those impacted by climate change must be at the forefront of solutions
But it is not simply enough to applaud ICA for its bold stance. We need a rapid shift in funding structures in the non-profit world to support groups like ICA who have taken a moral stand against financial institutions like Aviva. We need to ensure that the people most impacted by climate change are also at the forefront and are involved in developing climate solutions. And we need to widen the community of actors in the divestment debate, as non-profits can act as gatekeepers to key corporate relations leaving out those most impacted by these decisions.
AXA’s new ground-breaking policy shows globally that tar sands and coal are becoming uninsurable, uninvestable and eventually unbankable. We also hope to hear from Aviva that they will be dropping their tar sands investments and have a firm commitment to stop underwriting future projects once we renew engagement in the new year.
2018 is going to be another massive year for divestment with an imminent decision from the Norwegian Wealth Fund to divest $35 billion from oil shares, from corporations such as Exxon Mobil, Royal Dutch Shell, Total, Chevron and Norway’s own oil giant, Statoil.
All of these decisions and ‘wins’ need to be grounded in an intersectional divestment movement that takes the time to think about the reinvestment strategies, that is twinned with a just transition model and opens up the seats at the table for dialogue with those most impacted by climate change and holding the climate solutions. If we can do this, 2018 is going to be an incredible year for our movements and hope for the climate.
Teaser Photo credit: Former US tar sands test pit site, Flickr/BeforeItStarts, Creative Commons.