Fidelis Expands ESG Underwriting Rules, Including New Restrictions on Fossil Fuels
Fidelis Insurance Holdings Limited reaffirmed its commitment to sustainability by establishing expanded underwriting rules that include several businesses and challenges about its insurance lines of business.
The guidelines cover environmental and social issues, with 4 significant guidelines (Environmental, Human and Labour Rights, Animal Welfare, and Rule of Law) and six industry-specific guidelines (Defence & Armaments, Forestry & Agriculture, Mining, Coal, Oil & Gas, Nuclear). Fidelis has already addressed several of these issues, for example, by implementing a Forced Labour Clause in the marine cargo business since 2020 and taking a firm stand against animal testing.
Fidelis also stopped providing direct insurance for thermal coal plants, projects, and infrastructure in 2020, but the latest standards have widened the restrictions on fossil fuels. It highlights the critical role that insurance must play in assisting the transition to a low-carbon economy and is consistent with Fidelis' recent pledges as a member of the Net-Zero Insurance Alliance (NZIA).
Fidelis is committed to assisting clients in the energy sector on their path to net-zero energy. The transition requires major industries to make quick and significant efforts toward decarbonisation, including exploring the enormous prospects surrounding clean energy.
The new restrictions will initially apply to the insurance sector, with a treaty reinsurance approach being considered. Fidelis will improve its approach further in 2023 under NZIA commitments, which call for establishing intermediate decarbonisation targets within six months of the release of the NZIA target-setting protocol (expected in January 2023).
Fidelis already has restrictions on fossil fuels in its investment portfolio, including the exclusion of coal as well as oil and gas (unless revenue is less than 25%).
Richard Brindle, Chairman and Group Chief Executive Officer, said:
“The insurance industry has a hugely important role to play in holding companies to account and making change happen – but nothing changes unless we are prepared to walk away from activities that are harmful to the environment, people, society and animals. We don’t see enough of this yet, but we hope that insurers – and brokers – will increasingly engage with their clients to ensure that the insurance industry is not supporting damaging business practices.”
Olivia Brindle, Head of Sustainability, said:
“Fidelis has a strong commitment to doing the right thing, but we also believe that sustainable underwriting is good risk management and that there is a long-term link between ESG and performance. A sustainable policy on fossil fuels is key to meeting decarbonisation commitments as well as mitigating climate risk, so while we do not have all the answers yet, we know we need to start taking action today.”