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Investigation reveals insurance broker for an environmentally disastrous oil pipeline in East Africa and the employees fighting it from the inside
The Bureau of Investigative Journalism and the Financial Times can today reveal that Marsh, the world’s biggest insurance broker, bid for and won the contract to find insurers for the East African Crude Oil Pipeline (EACOP). This is in spite of over 100 Marsh employees signing a letter last year urging the company not to broker insurance for the pipeline because of its “disastrous consequences” for the climate.
The controversial pipeline is expected to generate more than 33 million tons of carbon emissions each year, derailing targets to limit global heating to 1.5 degrees. Backed by French oil giant TotalEnergies and the China National Offshore Oil Corporation (CNOOC), it will be built in a region where the devastating effects of climate change are already being felt.
This investigation shines a light on the activism happening inside companies, as young, environmentally-minded employees come up against industry veterans resistant to changing business practices to tackle the climate crisis. In their letter, the employees ask: “Will clients trust us to provide climate risk management if they know we also support projects which worsen these very risks?”
As broker, Marsh is now recruiting insurers who are themselves coming under pressure to rule out working on the pipeline. A growing list of insurers, including Beazley, Zurich, Axa and Swiss Re, have already distanced themselves from the project.
JPMorgan Chase, Citigroup, Wells Fargo and Morgan Stanley have all ruled out any financing role, according to people familiar with the matter.
Without insurance, such projects have no hope of raising funds. Prince Papa, Africa coordinator of the Laudato Si’ Movement, a Catholic climate charity said: “Investors are worried about the security of their investment. If there is no insurance of these investments then this project is dead. It will only remain on paper.”
Marsh McLennan has 81,000 employees and operates in 130 countries. Its subsidiaries include Mercer and Oliver Wyman, which offer advice on climate change as part of their consultancy work.
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The Bureau of Investigative Journalism is an independent not-for-profit news organisation based in London.
