Originally published on Public Citizen’s website.
Since American International Group (AIG) crashed in 2008 because of its reckless bets on financial products linked to predatory mortgage lending, the insurance giant has faded from the headlines. And its CEO, Peter Zaffino, is far for a household name. But we should all pay more attention to AIG and its chief executive for the company’s role in another crisis—this one climate-fueled.
Here’s how: AIG is one of the largest insurers of fossil fuels in the U.S., collecting as much as $675 million in premiums for covering the fossil fuel industry in 2021, according to the consultancy firm Insuramore. By providing coverage, AIG is enabling big polluters’ dangerous expansion plans: Without adequate insurance, companies cannot secure the financing they need to build new climate-polluting projects.
In other words, AIG is profiting off the climate crisis by insuring new fossil fuel projects that threaten human rights and devastate our air, water, and climate. As AIG’s top executive, Zaffino has the power to decide whether AIG will either keep enabling the fossil fuel industry’s destructive expansion plans, or cut ties with companies that threaten people and our planet.
Despite clear warnings that new fossil fuel projects will push us past safe climate thresholds, the oil and gas industry has major expansion plans that will fuel even worse climate harms. This is not only an environmental issue, it’s a racial justice issue. The fossil fuel industry disproportionately pollutes Black communities and tries to build many projects without the consent of impacted Indigenous communities, violating their right to Free, Prior and Informed Consent.
As a top global insurer of the oil and gas industry, AIG is complicit in this harm. Indigenous communities have demanded that AIG rule out projects that threaten their rights, including the massive Trans Mountain tar sands pipeline and drilling in the Arctic National Wildlife Refuge. This pressure, along with calls from climate activists, shareholders, and lawmakers, led AIG to end insurance for new tar sands and Arctic energy projects in March 2022. This shows that together, we can push AIG’s leadership towards insuring our future instead of climate catastrophe.
Zaffino has failed, however, to rule out AIG insurance’s support for several particularly harmful new oil and gas projects that threaten communities around the world, including:
- The East African Crude Oil Pipeline (EACOP): EACOP would be the world’s longest heated crude oil pipeline, slated to run through Uganda and Tanzania and posing catastrophic oil spill risks to Lake Victoria, a water source for over 40 million people. Local human rights defenders and activists opposing the project have been harassed, intimidated, and arrested. Twenty-one insurance companies have already ruled out coverage for this disastrous project, but AIG remains silent.
- Ichthys LNG in Australia: AIG was among the insurers providing coverage for the first construction phase of Ichthys LNG, one of the most carbon-intensive offshore liquefied natural gas (LNG) projects in Australia, from 2012-2017. Now, the project’s developers are planning a massive expansion that would unleash 590 million tons of carbon dioxide—nearly equivalent to all of Australia’s annual carbon emissions at present. So far, AIG has not responded to calls to rule out involvement in the expansion project.
As a top global fossil fuel insurer, AIG is involved in many other devastating oil and gas projects. But AIG hides behind industry secrecy on its fossil fuel clients. Energy companies have even started petitioning governments to keep their insurers hidden from the public.
What is AIG afraid of? The company adopted a net zero by 2050 goal, and any credible net zero pledge must rule out support for new coal, oil, and gas projects and their developers. AIG even committed to a fossil fuel phaseout, although it has not published a plan to get there. If AIG isn’t just greenwashing, it should follow the lead of its global peers and end financial support for oil and gas expansion.
It also makes business sense for AIG to cut its oil and gas ties. AIG lost around $450 million due to Hurricane Ian, and Zaffino has been calling for the insurance industry to address escalating losses from climate-related disasters. Yet his company is making its own problem worse by enabling the buildout of new fossil fuel projects. In fact, a key part of AIG’s climate strategy seems to be ending coverage for certain homeowners in states like California and Florida that are currently experiencing the worst climate-change impacts. Zaffino blithely calls this “strategic repositioning.” The hypocrisy is unconscionable.