Munich Re to cease investing in or insuring new oil and gas fields from April 2023
Global reinsurer Munich Re has committed that as of 1 April 2023 it will no longer invest in or insure contracts / projects exclusively covering the planning, financing, construction or operation of new oil and gas fields, new midstream oil infrastructure and new oil fired power plants.
The large, European reinsurer has stressed that it “aims to play its part in meeting the targets of the Paris Climate Agreement” by setting ambitious decarbonisation targets for its investments, re/insurance transactions, and its own business operations.
This goal has resulted in Munich Re announcing a set of new guidelines for oil and gas investments and underwriting, effective April 1st, 2023.
Specifically, the carrier has committed to no longer invest in or insure contracts / projects exclusively covering the planning, financing, construction, or operation of the following:
- New oil and gas fields, whereas at the end of December 2022 no prior production has occurred
- New midstream infrastructure related to oil, which have not yet been under construction or operation as of December 31st, 2022
- New oil fired power plants, which have not yet been under construction or operation as of December 31st, 2022
“This applies to direct illiquid investments, our primary, facultative and direct (re)insurance business. The same applies where such risks are contained or bundled in one cover together with other risks (e.g., existing oil or gas fields), when the cover is mainly designed to protect one or more of such new risks,” explains Munich Re.
Within its own listed equities and corporates portfolio, Munich Re will, from April 1st, 2023, cease to conduct new direct investments in pure-play oil and gas firms.
Further, from January 1st, 2025, the reinsurance giant will require a credible commitment to net-zero greenhouse gas emissions by 2050, including corresponding short and mid-term milestones from listed integrated oil and gas firms with the highest relative and absolute emissions.
Source: Reinsurance News, https://www.reinsurancene.ws/munich-re-to-cease-investing-in-or-insuring-new-oil-and-gas-fields-from-april-2023/