Chubb dubbed serial carbon underwriter as activists arm for AGM battle

Chubb remains a serial carbon underwriter, having laced already mild restrictions on carbon-heavy clients with sufficient loopholes to remain on the leaderboard of energy industry supporters, a key activist investor group said in ratcheting up pressure for a pending proxy battle on climate goals.

“ Chubb remains one of the major underwriters of the fossil fuel sector, including new fossil fuel development,” Green Century Capital Management said of its recently filed resolutions for Chubb’s May 19 GM.

“While addressing some coal-related and all tar sands-related risks, Chubb’s underwriting exclusions leave considerable loopholes allowing it to insure new coal, oil and gas risks.”

A coal exclusion crafted in 2019 only covers new capacity in excess of 30% of an energy company's revenue stream and makes exceptions for regions with “no other options” or where renewables are considered “not viable,” opening the door to do business with an extra 50 coal-related new capacity projects worldwide.

“Equally troubling, it has no exclusions on oil or gas development.”

The underlying target of the activist drive could be the headline coverage of nine new offshore oil developments on the Brazilian coast, led by state oil firm Petrobras, which activists complain has the fifth largest oil and gas expansion plans by volume in the world.

Fresh comments in new proxy documents follow word that Chubb will face down several activist shareholder actions at the May 19 GM. Green Century Capital Management has drafted a resolution for a full ban on underwriting new fossil fuel supplies while As You Sow Shareholder Action Account will demand in-depth reporting on the climate footprint of the group's underwriting, insuring, and investing activities.

Chubb has already fired back against what it broadly considers a too-much-too-soon approach. Chubb justifies its climate credentials with reference to its longer-standing restrictions on new capacity in coal and planned caps that should trim existing coverage starting in 2022. A “blanket prohibition” would preclude managing an orderly transition, Chubb argued. Meeting reporting demands “would be impossible” given a lack of methodologies, management added.

Green Capital defends its own call as the minimum necessary to meet the International Energy Agency’s (IEA) Net Zero by 2050 Roadmap and assures it would not require any shuttering of existing energy capacity and also “allows board and management appropriate flexibility in its implementation.”

In a seeming backing of resolutions from As You Sow Shareholder Action, Green Capital claims Chubb climate reporting lacks transparency. Investors “lack insight into Chubb's climate risk management, the extent of its exposure to the fossil fuel industry, and the percent of premiums collected by industry sector.”

Current reporting “provides only the most general overview of how [ Chubb] is thinking about climate risk or planning for increases in natural catastrophe claims.”

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