Paris, May 27th 2020 – SCOR announced that it’s joining the Net-Zero Asset Owner Alliance and the adoption of new measures on coal. SCOR commits to no longer invest in any company developing new coal projects, across the entire value chain, or deriving more than 10% of its revenues or electricity production from coal. SCOR also commits to bring to zero the exposure of its investment portfolio to coal by 2030 in EU and OECD countries and by 2040 elsewhere.
Reclaim Finance welcomes the new divestment measures: SCOR becomes the 6th French investor to have a Paris-aligned coal exit policy (3). However, Reclaim Finance denounces the lack of any commitment on underwriting, the core business of the reinsurer. SCOR must review immediately get back to work and align its insurance policy with its investment policy.
On July 2nd last year, the Paris financial center, through its professional federations, announced that its members – banks, insurers and investors – would adopt a global strategy to exit the coal sector by mid-2020. With its new policy, SCOR meets this target for its investment business. Some other French investors should follow its lead. The investor La Française who manages 66 billions of dollars has no coal policy at all and ODDO BHF AM who manages 62.2 billions of dollars applies some coal exclusion criteria only on its ESG funds. The other insurers Groupama and Covéa Finance are also far behind.
However, SCOR fails to meet the target set by the Paris financial center for its insurance and reinsurance branch. As a reminder, SCOR has only stopped facultative coverage to new coal projects. Unlike the world’s largest reinsurer Swiss Re, SCOR can still reinsure companies active in the coal sector, or even sign reinsurance treaties with insurers which, like the insurer PZU, always insure new coal projects.
We have only 20 years to close thousands of coal assets, and only about 10 more years for the oil and gas sector. Yet fossil fuel companies are still planning many new projects (4). Their construction depends largely on the ability of companies to secure insurance coverage and, because they are very risky, reinsurance coverage. While SCOR is a small investor, it is the 4th largest reinsurer in the world. SCOR’s coal divestment policy sends a great signal to the market and other financial institutions. However, the reinsurer keeps supporting the coal expansion and blocks its phase-out by maintaining coverage to the coal sector.
For Yann Louvel, policy analyst at Reclaim Finance: “SCOR fails to apply its divestment therapy to its insurance and reinsurance services and can still insure big polluters. Last year already, SCOR announced its divestment from tar sands but failed to also stop its insurance coverage to the sector (5)”.
For Lucie Pinson, founder and director at Reclaim Finance: “Its double standards are explainable from a business point of view but unjustifiable and unforgivable from a climate point of view, given the key role played by insurance in the expansion of fossil fuels”.
Reclaim Finance calls SCOR to commit to bring to zero the coal exposure of its insurance and reinsurance portfolio by 2030 in EU/OECD countries and by 2040 elsewhere and to immediately stop providing coverage for companies planning new coal plants as well as to companies highly exposed to coal.
SCOR is the 6th French financial player to make announcements on coal or shale oil and gas in May. With the exception of Societe Generale, all the French banks made such announcements at their general meetings. Reclaim Finance and Friends of the Earth France have posted a detailed analysis of these commitments online. (6).