Generali ends insurance for midstream, downstream oil projects

Generali, Italy’s largest insurer, has announced it will no longer provide new coverage for companies involved in oil and gas transportation, processing, and distribution if they do not meet energy transition requirements.

The company said it will cease offering policies for risks related to the “midstream” and “downstream” sectors of the oil and gas industry, which include liquified natural gas (LNG) terminals, pipelines, and gas-fired power plants.

The decision aligns with the long-term goals of the Paris Agreement, which aims to limit global warming to below 2°C and encourages efforts to limit temperature increases to 1.5°C above pre-industrial levels.

The Intergovernmental Panel on Climate Change (IPCC) has highlighted the need for rapid decarbonisation across all sectors, stating that global greenhouse gas emissions must be halved by 2030 and fossil fuel use must be phased out.

Generali reiterated its commitment to these goals, stating it aims to transition its investment and insurance portfolios, along with its own operations, to net-zero emissions by 2050.

The insurer highlighted its participation in initiatives such as the Net-Zero Asset Owner Alliance (NZAOA) and the Forum for Insurance Transition to Net-Zero (FIT), while it also supports the Task Force on Climate-related Financial Disclosures (TCFD).

The insurer also noted that its climate strategy focuses on its roles as investor, insurer, and employer, integrating climate solutions into its business practices. This includes reducing exposure to assets that increase transition risks and encouraging its partners to shift towards a sustainable economy.

Generali said that it also backs initiatives such as the “Investing in a Just Transition” project, which aims to ensure the social aspects of the transition to a low-carbon economy are addressed.

Insure Our Future responds

Environmental groups have responded positively to Generali’s decision, while calling for further action. Insure Our Future welcomed the move but urged other major insurers—such as Chubb, Allianz, AXA, and Sompo—to implement broader policies that would halt support for oil and gas expansion throughout the entire value chain, including LNG projects.

Generali’s policy does not apply uniformly across all projects. While the company will not insure new upstream oil and gas projects, its exclusion of midstream and downstream infrastructure only applies to energy companies identified as “transition laggards.”

This suggests that companies deemed capable of achieving net-zero emissions by 2050 could still receive coverage for their midstream projects, according to the environmental group.

As such, some environmental campaigners argue that the insurer’s policy does not go far enough. Reclaim Finance’s Ariel Le Bourdonnec noted that, while Generali’s decision is a positive first step, it still allows for the insurance of companies involved in oil and gas expansion, despite scientific consensus that no new fossil fuel projects should proceed if climate goals are to be met.

“The science is clear,” Le Bourdonnec said. “There is no room for new oil and gas projects if we want to preserve an insurable world. Other insurers such as Allianz, AXA, Chubb and Sompo must step up and introduce policies covering all new oil and gas projects now. “

Antonio Tricarico from ReCommon echoed these concerns, stating that Generali’s decision signals that long-term risks associated with oil and gas expansion have become too significant.

“Italian financial institutions should recognise this and stop financing the new gas infrastructure of Italy’s fossil giant, Eni, in line with IEA’s recommendation to keep global warming under 1.5°C,” he said.

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