Campaign Urges Insurance Industry To Drop Fossil Fuel Support

A coalition of NGOs is putting increased pressure on the insurance industry to stop insuring coal and tar sands projects and companies. Called Insure Our Future, the new campaign has been endorsed by groups that include the Sierra Club, the Waterkeeper Alliance, the Rainforest Action Network, and Greenpeace.

“The insurance industry is supposed to protect us from catastrophic risk, yet when it comes to climate change, they’re adding fuel to the fire through their investments and underwriting,” said Lindsey Allen, executive director of the Rainforest Action Network and a partner of the campaign.

Spun off from the global Unfriend Coal campaign, Insure Our Future is targeting US insurers specifically. Over the summer, the NGO partners sent a letter to the CEOs of 22 major US insurance companies, urging them to divest from coal companies and companies developing projects to extract and transport tar sands. The 40 largest US insurers hold over $450 billion in coal, oil, gas and electric utility stocks and bonds, according to the campaign. The letter also requested they stop insuring those companies and projects.

“As you divest from and stop underwriting coal and other fossil fuel projects, at a corresponding pace scale up investments in clean energy companies and insurance coverage for clean energy projects that follow international human rights, Indigenous rights, social and environmental standards,” the letter recommended.

The writers suggested that US insurance companies quantify the carbon footprint of their investments and insurance activities.

Overseas, the Unfriend Coal campaign has contributed to policy changes. “In the last three years, 17 large international insurers have divested about $30 billion from coal companies, and six have stopped or limited insuring the coal industry, including Allianz, Axa, Zurich, and Swiss Re,” the campaign leaders say.

Climate Change Risks

Climate change poses enormous risks to the insurance industry. Earlier this month, California Insurance Commissioner Dave Jones announced more than 10,000 claims filed from the Carr and Mendocino Complex fires alone, totaling $845 million in insured losses. The California Department of Insurance also published a report saying that climate scientists have attributed the rise in destructive wildfires in part to climate change.

Insurance industry leaders, regulators, nonprofits, and business leaders are gathering for the Insurance & Climate Risk Americas conference in New York, which focuses on “the disruptive cascade effect of physical environmental risks and their impact on insurance risk as well as the threats and opportunities for investment, risk, actuarial and underwriting teams to consider in light to the adverse impacts of climate change.”

Maurice Tulloch, CEO of international insurance at Aviva, is a keynote speaker at the conference. He told Environmental Finance that climate change is a major strategic issue for his business and that of the insurance industry. He said that Aviva’s policy of engaging with fossil-fuel companies is yielding results.

Two of those companies committed to no further capital expenditure on coal, and five companies committed to targets to reduce their greenhouse gas emissions to be aligned with the Paris Agreement, Tulloch said.

“Our approach as an investor is to engage first and divest if necessary,” he said. “Engagement helps us to understand the direction of intended travel for a business and so continue our support of coal companies who are moving their focus to low carbon and renewable energies. We don’t see divestment as a badge of honor, but rather as a failure of engagement.”