Environmentalists Say U.S. Insurers Lag Behind Peers on Fossil Fuels

December 3, 2020 by

U.S. insurance companies lag behind their global peers by enabling the fossil fuel industry, according to a report from an environmentalist group out this week.

The Insure Our Future campaign released its fourth annual scorecard on insurers’ climate policies: Insuring Our Future: The 2020 Scorecard on Insurance, Fossil Fuels and Climate Change.

The report finds that most European and Australian insurers no longer provide coverage for new coal projects, making it costlier to secure the insurance. Coal companies face rate increases of up to 40%, while controversial projects like the Adani Group’s Carmichael coal mine in Australia are finding it hard to obtain insurance at all, the report shows.

Since the Insure Our Future campaign launched in 2017, at least 23 companies have ended or limited their coverage for coal projects. Global insurers are also shifting capital away from coal: the combined assets of insurers committed to divestment or to no new coal investments increased from $4 trillion in 2017 to $12 trillion in 2020—around 40% of the industry’s total assets, according to the report.

All 10 U.S. insurers assessed in the report received negative scores on “climate leadership” for supporting lobby groups who oppose climate efforts. The scorecard—which is published by 17 organizations from nine countries—ranks 30 companies in total based on survey responses and public information.

“U.S. insurers like AIG, Liberty Mutual, and Travelers are providing a lifeline to the struggling coal industry and underpinning the expansion of oil and gas infrastructure that the climate cannot afford,” Ginger Cassady, executive director of Rainforest Action Network, said in a statement. “While leading global peers are exiting the coal sector and taking steps to restrict oil and gas business, the U.S. industry is continuing to pour fuel on the flames of the climate crisis.”

Corporate America

A chunk of corporate America signed onto a statement this week calling on President-elect Joe Biden to work with Congress on “ambitious, durable, bipartisan climate solutions.”

The statement doesn’t offer support for a specific policy, but its signatories represent a cross section of the U.S. economy, including utilities, banks and auto manufacturers. Big names include Amazon.com Inc., Bank of America Corp., BP PLC, Walmart Inc., DSM and Exelon Corp., according to a Scientific American article.

The movement is organized by the Center for Climate and Energy Solutions, or C2ES.

“To achieve a net-zero economy, the United States must establish durable national policies that harness market forces, mobilize investment and innovation, and provide the certainty needed to plan for the long term,” they wrote.

General Motors Co., which signed the statement, said last week it would end its support for the Trump administration’s clean car standards rollback and instead support Biden’s efforts to deploy electric vehicles, Scientific American reported.

Dutch Shell

Environmental activists took Royal Dutch Shell to court this week with demands that the energy firm drastically reduce the production of oil and gas to limit its effects on climate change.

Seven groups, including Greenpeace and Friends of the Earth, filed the lawsuit in the Netherlands in April last year on behalf of more than 17,000 Dutch citizens who say the oil major is threatening human rights as it continues to invest billions in the production of fossil fuels, Reuters reported in an article on Insurance Journal.

The groups want Shell to reduce its greenhouse gas emissions by nearly in half by 2030 and to zero by 2050, effectively forcing the Anglo-Dutch firm to quickly move away from oil and gas and direct its investment to sustainable sources of energy.

Shell repeatedly has agreed that action to fight climate change was needed, but said that this court case would not help.

“No company can change the energy system by itself,” Shell’s lawyer, Dennis Horeman, said in court. “All countries where Shell operates are determining policies to shape the energy transition. Shell will have to adjust its priorities and investments to those policies.”

The plaintiffs say Shell is aware of the detrimental effects fossil fuels have on climate change, and that its policies put the company on “a collision course with international climate agreements.”

New Zealand

New Zealand declared a climate change emergency and committed to a carbon-neutral government by 2025, in what the prime minister Jacinda Ardern called “one of the greatest challenges of our time,” The Guardian is reporting.

A motion tabled in parliament on Wednesday recognized that “the devastating impact that volatile and extreme weather will have on New Zealand and the wellbeing of New Zealanders, on our primary industries, water availability, and public health through flooding, sea level rise, and wildfire.”

The motion also acknowledged an “alarming trend in species decline and global biodiversity” including the decline in New Zealand’s indigenous biodiversity, and included a declaration of a climate emergency that was supported by the Green Party and Māori Party and opposed by the National and Act parties.

The article reports that the government sector will be required to buy only electric or hybrid vehicles, the fleet will be reduced over time by 20% and that all 200 coal-fired boilers used in the public service’s buildings will be phased out.

Opposition parties called the move a publicity stunt, and the National Party leader, Judith Collins, said it was “virtue signaling,” the Guardian reported.

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