One of the world’s largest insurance companies has joined the ranks of financial institutions refusing to support oil development in the Arctic.
American International Group on Tuesday announced a sustainability policy that includes an immediate cessation of investment or insurance for any Arctic oil projects.
“AIG is focused on the realities of climate change. The data about climate change is unambiguous we believe that AIG can be a catalyst for positive change as it relates to sustainability advancements and renewable energy expansion,” Peter Zaffino, the company’s chairman and chief executive officer, said in a statement.
It is the first such announcement from a U.S. insurance company, according to The Wilderness Society, one of the groups that have lobbied financial institutions to adopt such policies.
Policies barring financial support for Arctic oil development in general or Arctic National Wildlife Refuge oil development in particular have already been adopted by several major U.S., Canadian and European banks, as well as several non-U.S. insurance companies. Among them is AXIS Capital, a giant global insurer based in Bermuda, which confirmed its policy in January.
Karlin Itchoak, Alaska state director of The Wilderness Society, said AIG’s new policy should spur similar actions by more insurance companies.
“This is a significant milestone in efforts to address the climate emergency and protect the sacred calving grounds of the Porcupine Caribou Herd in America’s last great wild place — the Arctic National Wildlife Refuge — which has been stewarded by Indigenous Iñupiat and Gwich’in peoples since time immemorial,” Itchoak said in a statement.
“The Arctic is ground zero for climate change, and I hope more American insurance companies will see the wisdom in AIG’s sound risk-management decision and conclude that the risks are too high to underwrite fossil fuel development in the Arctic.”
The new policy, which also includes a ban on supporting coal-fired power plants, contains the steps AIG is taking to achieve its previously announced goal of achieving net-zero emissions by 2050, the company said.
The trend among financial institutions against Arctic oil development has been fought by Alaska politicians and some Alaska government officials, but no action has resulted from those efforts.
The Trump administration, in its waning days, tried to enact a rule preventing banks from withholding financial support for Arctic oil development. That was in response to calls from the Alaska Congressional delegation, which accused banks of discrimination against Alaska and Alaska Natives.
Gov. Mike Dunleavy vowed in late 2020 to introduce a bill mandating divestment from financial institutions refusing to back Arctic oil development, but no such bill passed the legislature or was even introduced by the governor.
Most recently, the Alaska Industrial Development and Export Authority considered a resolution that would allow the state economic development entity to “restrict certain investments in companies that have adopted policies that may be detrimental to Alaska’s economy,” though the resolution’s terms did not specify an outright ban.
AIDEA board members, at their Jan. 27 meeting, tabled the resolution, pending further review.
AIDEA was nearly the only bidder in the ANWR lease sale held at the end of the Trump administration. AIDEA currently holds seven ANWR leases that are in limbo as the Biden administration reviews pre-sale environmental studies that it has deemed were shoddy. AIDEA in November sued the Biden administration over that new review.