The Observatory 173 Climate – Life Insurance was created by The Shift Project in 2016 to monitor the implementation by life insurance in France of Article 173 of the Energy Transition Act (3), which requires financial portfolio managers to explain how they take into account (or not) the climate issue in managing their assets.
This law provides for annual reporting by institutional investors on their climate-related risks, as well as on their investment policy to address them.
The Observatory 173 produced its first report in 2017, based on the publications of the twelve largest French life companies, which alone manage nearly a third of the financial savings of the French (with more than 1300 billions euros).
In 2018, the analysis focused on coal investment strategies. While a review of the application of the provisions of Article 173 of the law will be carried out by the government before 31 December 2018, the Observatory 173 publishes the first analysis of coal exclusion policies in the investments of French life insurance companies.
Observatory 173 addresses the issues of the underlying objectives of the coal exclusion policies of French life insurers. Are exclusion policies part of an individual approach or a collective ambition? Is it herd behaviour or the result of an autonomous reflection ? Are some actions in practice just plain green washing ? Do investors have a clear idea of their initial situation ? Do they act consistently for other carbon energies ? Do they have a strategy regarding scope extensions already imagined or even planned ? Are they sometimes in a conflict of interest situation ? Have they identified reputational or judicial risks ? Finally, do life insurers properly educate the general public about their strategy, when they have one?