MAPFRE, a key Spanish insurer with €55 billions assets under management, has adopted new fossil fuel exclusion criteria during its 2021 annual general meeting. Lagging behind other European insurance companies with a relatively weak coal policy, MAPFRE only marginally catches up with its peers and remains far from adopting a robust coal exit policy, such as that of AXA.

1. What’s new

While no change is made regarding MAPFRE’s investments restrictions, several changes are outlined below regarding its insurance activities:

  • Regarding the coverage of specific projects, MAPFRE extends its exclusion policy to new infrastructure projects, in addition to new coal mining and coal power projects (with exceptions);
  • Regarding the coverage of coal companies, MAPFRE now excludes:
    • new mining companies extracting over 20Mt of thermal coal a year or generating more than 30% of their revenues from thermal coal;
    • companies that plan over 2GW of coal power;
    • companies deriving more than 30% of their revenues from coal power generation.
  • Adoption of a coal phase-out commitment by 2030 in Europe/2040 worldwide, unless companies have “implemented commitments with the energy transition and decarbonization”.

Beyond coal, MAPFRE has committed to no longer underwrite any new tar sands extraction or transportation projects, and that its portfolio will not have any insurance projects related to the extraction or transportation of tar sands by 2030. It will also stop insuring Arctic-related projects.

2. Our analysis: too little, too late

  • On coal

MAPFRE’s decision to stop insuring new coal related infrastructure projects, on top of new coal mines or plants, is welcome, considering the importance of such projects in opening new coal reserves. However, it is disappointing MAPFRE did not remove the possibility to have case-by-case exceptions, given that it has not used such an option for the past two years.

However, when it comes to companies developing such projects, the restrictions are highly insufficient. According to the GCEL, 196 companies are planning less than 2GW of new coal capacity, for a total of 160 GW of new coal capacity. Moreover, MAPFRE fails to exclude the 364 other coal developers, which are either planning new coal mines or new coal infrastructures. MAPFRE would benefit from replicating the science-based policy of AXA, of zero tolerance in regard to coal expansion.

We welcome the progress made by aligning restrictions of the insurer MAPFRE on MAPFRE’s investments regarding exclusion thresholds, but believe these criteria are clearly insufficient, especially since they only apply to new clients on the mining side. This makes MAPFRE’s policy inadequate to address the current climate emergency. There is indeed no restriction over the biggest coal power producers regardless of their size, and only a lax restriction for new mining companies (maximum 20Mt a year for new customers). Also, MAPFRE has decided to use a maximum threshold 30% of revenues linked to coal but uses the wrong metric. By using revenues instead of the coal share of power production, this exclusion criterion does not reflect as precisely the actual dependence of companies on coal power.

The third main weakness of MAPFRE policy is the absence of an effective clear phase-out commitment. MAPFRE does commit to coal phase out by 2030 in Europe, 2040 in the rest of the world, but allows companies to opt out by simply publishing a transition commitment. By not defining further what it will exactly require from companies, MAPFRE leaves many questions unanswered regarding the seriousness of its coal phase out strategy.

The fact that this new policy does not cover the reinsurance activities of MAPFRE is also problematic. Considering all these elements, MAPFRE still fall short of adopting a robust coal policy.

  • On oil & gas

On oil & gas, we welcome the decision of MAPFRE to stop underwriting new tar sands projects, including pipelines, and to end the coverage of all existing ones by 2030. It will also stop the coverage of all projects north of the Artic circle. However, this leaves aside other unconventional and most polluting oil & gas projects (fracking, Deepwater, LNG). This is clearly insufficient since MAPFRE will still be able to support oil & gas expansion projects and developing companies unlike Suncorp or Generali that have adopted stricter policies.

MAPFRE’s Scores in the Coal Policy Tool

This table presents the coal scores of MAPFRE based on five criteria of the Coal Policy Tool

3. Our conclusion

By reviewing its coal policy, MAPFRE Insurances only marginally improves its ranking in the coal policy tool, by extending its exclusion criteria for developers. It does not make any improvement on its investment policy.

However, its exclusion thresholds are clearly insufficient and its restrictions over the insuring of coal developers are too permissive to be Paris-aligned. Another issue is the absence of a tangible coal phase-out strategy. There is therefore a lot of room for improvement.

MAPFRE also need to urgently strengthen its oil & gas exclusion policy, starting by ending its financial support towards developers, especially of non-conventional hydrocarbons