27 May 2021
Marsh McLennan is one of the few companies left still willing to support the “world’s most insane energy project“; the infamous Adani Carmichael thermal coal mine and rail line in Australia. This climate-wrecking partnership undermines Marsh McLennan’s claims to care about “the greater good” and is seriously harming its reputation.
Marsh McLennan is putting a lot of effort into convincing its employees, clients and the general public that it cares. The front page of its website gives pride of place to its “ESG” (environment, social, governance) Report. When announcing some internal emissions reduction targets in January 2021 (which amount to little more than changing light bulbs and buying dodgy offsets) its CEO Dan Glaser said “we recognize the opportunity, and indeed the obligation, that we have to be good stewards of the environment“. This is the latest in a pattern of greenwash. In May 2020, in the face of pressure from its own staff and the #StopAdani campaign, it released a one-page sustainability policy with no tangible actions, which was immediately attacked as greenwashing. It also didn’t seem to impress investors, with Australian Ethical dumping its Marsh McLennan shares the next month.
Marsh McLennan’s commitment to avoiding catastrophic global warming is obviously only skin deep. Scratch the surface and you find that its insurance broking business, Marsh, is playing a key role in setting off one of the world’s biggest carbon bombs – the massive Adani Carmichael thermal coal project in Australia. This is despite the Carmichael mine not having consent from the Traditional Owners of the land on which it is being built, threatening water supplies and endangered species and increasing shipping through the already dying Great Barrier Reef. On top of the emissions from its own coal, the Carmichael mine will also help open up an entirely new thermal coal basin.
Marsh has been lining up insurance coverage for Adani since at least 2015, the same year in which world leaders signed the Paris Agreement recognising the need for action to reduce the dangers of climate change. But since 2019 it’s been growing increasingly difficult to do so as insurers distance themselves from this highly controversial project
With mainstream insurers like Axa, HDI Global and Liberty Mutual refusing to renew policies that year, Marsh went to the Lloyd’s of London market. A leak led to its negotiations with Canopius and Axis being outed in the media and falling apart. However, it persisted and, we now know that towards the end of 2019 Marsh was able to find via Lloyd’s all the insurance Adani needed for the construction of its mine and rail line.
Unfortunately for Adani, this solution is now looking precarious. In mid-2020 a brave Marsh employee leaked information to the media revealing that Aspen, via Lloyd’s of London, was involved with Carmichael coal. A Lloyd’s employee subsequently confirmed that all insurance for Carmichael was via Lloyd’s. This kicked off a major community backlash.
The number of major insurers refusing coverage for Adani Carmichael has now hit 36, including four current Lloyd’s insurers which will not be renewing policies (Brit, Apollo, Tokio Marine Kiln and Aspen). In addition to this, one of Adani’s most important contractors, BMD, has recently admitted that it was unable to find three types of insurance specifically for its work on Carmichael coal.
All this evidence leads to the likely conclusion that without Marsh by its side, Adani itself could be unable to find insurance as soon as the last quarter of 2021. If that happened, Adani would need to make the choice between proceeding with Carmichael coal at very high risk to its entire business, or finally walk away for good.
In April 2021 another major insurance broker, AJ Gallagher, committed to having nothing to do with the Adani Carmichael project. In September 2020 Aon told a customer that it was not involved with the Carmichael project.
Marsh now has a decision to make. It can continue its climate-wrecking work for Adani or it can take this moment to match its words with action and begin playing a part in the transition to a low carbon future.
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