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23 Feb 2024, 13:37
Benjamin Wehrmann

German insurers cover U.S. LNG industry, despite sustainability pledges – report

Correctiv

Leading German insurance companies continue to provide cover to liquefied natural gas (LNG) infrastructure, even as they often make sustainability a key corporate goal, investigative news outlet Correctiv has said. Insurers Allianz, Hannover Re, Talanx and Munich Re have entered into contracts for insuring LNG projects in the U.S., Correctiv said after reviewing internal documents, which often were signed by subsidiary companies. A spokesperson for Allianz said the company would not comment on its customers. Insurers such as Allianz have said they will not provide cover for new oil and gas fields -- with very few exceptions. Allianz justified possible operations citing “energy security” which can overrun the general dedication towards ending business in new oil and gas extraction. In addition, Allianz has no restrictions for infrastructure for transporting gas, such as the LNG projects. Due to the loss of Russian gas supplies to Europe, “a full restriction” of LNG currently “would not make sense economically or from a sociopolitical perspective,” the company said.

Regine Richter from NGO Urgewald commented that insurance companies would act as “the hidden helpers of the fossil industry,” while the companies publicly declare their intention to support climate action and decarbonisation. Richter said the companies had to resolutely ban fossil fuel projects to make these claims credible. Many oil or gas projects would become substantially more expensive without insurance covers, meaning companies would struggle to implement them without the assistance of insurance companies, Marcel Meyer of consultancy Deloitte told Correctiv.

Companies like Allianz and Munich Re, which routinely point at the drastic consequences climate change will have for the insurance industry, have made pledges to gradually disengage from the fossil fuel industry and require energy industry companies to present credible plans for achieving net zero emissions. However, climate activists for years have complained that the insurers lack resolve and integrity regarding their claims.

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