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LONDON (Reuters) – Italian insurer Generali will no longer provide new cover for companies involved in oil and gas transportation, processing and distribution if they fail to have a good enough energy transition plan, a statement on its website said.
Generali said it will no longer provide policies for risks associated with the so-called “midstream” and “downstream” oil and gas sector, including new liquified natural gas terminals, oil and gas pipelines and oil and gas-fired power plants.
The commitment, in a technical note dated October on the company’s website, builds on the insurer’s earlier decision not to underwrite risks related to new oil and gas fields.
A spokesperson for the company did not respond to a request for comment.
Generali is the first global insurer to adopt such a policy, non-profit Insure our Future, which welcomed the move, said in a statement on Tuesday.
The move to stop insuring new LNG terminals is significant, as LNG producers plan to triple their production capacity globally, Insure our Future said.
But it noted Generali’s update only covers midstream oil and gas projects it deems to be “laggards” in the transition to a low-carbon economy.
Generali will continue to offer cover for companies in these sectors which have effective energy transition strategies in place aimed at achieving a net-zero target, the insurer said in its update.
Generali is also introducing new restrictions on its investment portfolio for companies identified as transition laggards. In particular, Generali will no longer invest in new bonds issued by such companies.
(Reporting by Virginia Furness; Editing by David Gregorio)