AXA XL Publishes its 2020 Sustainability Report
We are proud to be featured on page 8 of AXA XL’s 2020 Sustainability Report, recognizing our work with breakthrough low-carbon technologies.
Below is the text of NER’s feature. Also check out Sustainability at a Glance, an abridged version of the report for clients and brokers.
Encouraging sustainable practices through our products
At AXA XL we’re continually seeking ways to help our clients address insurance challenges that also align with our sustainability initiatives.
Our Environmental team in France is working with Marsh to assess and mitigate biodiversity-related risks. Clients are invited to complete environmental risk prevention audits with measurable criteria, and those with industrial sites are encouraged to carry out initial biodiversity diagnostics and integrate the results into their risk management plan. AXA XL France offers a reduction on clients’ deductibles for environmental risk policies to support clients’ efforts to be responsible.
In 2020, the North American Environmental team added Green Building Materials Expense supplemental coverage to its Pollution and Remediation Legal Liability (PARLL) policy. This insurance coverage protects businesses against loss, remediation expense and legal defense expenses that may arise from sudden and gradual pollution conditions. Now businesses not only have the financial help to clean up a pollution incident, such as a fuel oil spill, they can take it a step further. With this added Green Building coverage, in the event of a pollution incident that causes property damage, clients can choose to use green, sustainable materials in the property’s restoration.
AXA XL’s North America Construction business has developed tailored Builders Risk insurance programs to address clients’ mass timber project risks. Mass timber, which includes cross-laminated timber (CLT) is gaining popularity in North America. It’s also considered a more sustainable building material; according to the Wood Council, replacing steel with mass timber would reduce carbon dioxide emissions by 15% to 20%. The process of manufacturing timber uses substantially less fossil fuel energy per unit volume than steel, concrete, or aluminum, meaning that timber has a lower carbon footprint.
As part of AXA XL’s commitment to developing sustainable products, we’re committed to exploring new opportunities. An example of this is our work with The Nature Conservancy (TNC), a global environmental nonprofit, and The University of California, Santa Cruz. In October this collaboration resulted in the launch of a feasibility report on developing a mangrove insurance product. The report, Reducing Caribbean Risk: Opportunities for Cost-Effective Mangrove Restoration and Insurance, identifies 3,000 km of coastline across 18 countries in the Caribbean region where poststorm mangrove restoration would provide flood protection benefits that significantly outweigh the cost of mangrove rehabilitation. The report outlines how an insurance product could be designed to finance this restoration and the conditions needed to bring the product to market. Phase two is underway to identify potential pilot sites and scope product development.
Another example of an evolving area of work for AXA XL is our development of a ‘Circular Economy’ product. We are currently assessing opportunities for AXA XL to offer a product or service that reduces waste in the event of a client’s loss, encourages our clients to follow sustainable practices and enables a ‘Circular Economy’, where materials re-enter the supply chain or are otherwise reused or recycled.
In addition, New Energy Risk (NER), a member of the AXA XL group of companies, continues to develop performance insurance solutions for the technical risk associated with breakthrough low-carbon technologies (e.g. renewable energy, fuel cells, energy storage, energy efficiency, carbon capture, hydrogen, waste to energy, and biofuels). This is possible thanks to NER’s proprietary and bespoke risk modeling and assessment. Products include solutions for performance insurance, warranty backstops, and business interruption insurance. These ultimately seek to reassure customers and/or financiers who would otherwise not accept new technology performance risk.
NER-supported clients have unlocked over $2bn in capital for their sustainable technologies, companies, and projects, supported by over $1bn in total insurance capacity. By enabling capital efficiency, new technologies go more quickly from development to deployment and commercial scale, with widespread customer adoption. Aggregated NER client projected results include:
- 449,000 tons/year waste processed
- 695,000 MWh/year clean energy generated
- 50 million gal/year alternative fuel produced,
- and 320,000 tons/year CO2e avoided