Report: A Fifth of U.S. Insurance Company Board Members Have Worked in Fossil Fuel Industry

October 7, 2021 by

A report out Thursday from a climate change advocacy group alleges that more than one-fifth of U.S. insurance company board members have worked for the fossil fuel industry, and that two-thirds of all U.S. insurance company board members are “climate conflicted.”

The research was commissioned by the advocacy group. It was conducted by DeSmog, a network of investigative reporters focused on climate journalism. They looked at 371 directors in 30 of the world’s top property and casualty insurers.

“There is a notable prevalence of directors with current and past connections to some of the world’s most polluting industries on the boards of major insurers,” said Rachel Sherrington, lead researcher on the project. “This includes directors who currently hold leadership roles at major emitters, as well as others who’ve spent the entirety of their careers in high-carbon industries. Public support for scientifically-led action on the climate crisis is high, and the directors of these insurers have the chance to put themselves on the right side of history.”

In Europe, 11% of directors have worked in fossil fuels, and 57% are “climate conflicted,” while in Asia, the numbers are substantially lower, in part due to lack of data, the report shows.

Roughly 6% of all the directors analyzed had current roles working in fossil fuel companies overall, with the research showed a number of directors that were board members of some of the world’s largest emitting energy companies.

Liberty Mutual director Joseph Hooley, for example, is a board member at the second largest oil company in the U.S., ExxonMobil, while Erhard Schipporeit, a supervisory board member of German insurer Hannover Re, is supervisory board member of RWE.

Washington Commissioner Summit

Washington Insurance Commissioner Mike Kreidler held his virtual Climate Summit 2021 on Oct. 6.

Kreidler founded and has chaired the National Association of Insurance Commissioners’ Climate Risk and Resilience Working.

The summit highlighted the latest science, and the best practices in the private sector, as well as regulatory approaches to combat climate change.

The lineup features several speakers, including Gov. Jay Inslee, and of course Kreidler.

Amy Snover, director of the climate impacts group and Northwest climate adaptation science center at the University of Washington, talked about the anticipated impacts of climate change.

She said scientists expect to see area burned by wildfire in the Pacific Northwest quadruple in coming years, while sea level rise will impact the coasts.

She added that climate change “brings real physical threats” to our infrastructure in the Pacific Northwest.

Climate and Credit Ratings

A growing number of investors, academics, policymakers, and regulators are questioning whether credit ratings are accounting for the impact that extreme weather events and policy changes related to global warming will have on borrowers.

Alarms are ringing about a financial danger related to climate change: risks lurking within government bonds, the biggest part of the global debt market, according to a Bloomberg article on Insurance Journal this week.

When those risks do materialize they threaten to trigger a sudden, chaotic asset collapse, creating effects that could “sweep through pension funds and the balance sheets of central and commercial banks,” the article states.

“A lot of this looks like it’s years and decades ahead, but when you look at the financial implications, you run into risks of Minsky-type moments and rapid devaluations,” Steven Feit, an attorney at the Center for International Environmental Law in Washington who focuses on climate liability and finance, told Bloomberg. “The climate time scale is decades or a century long. The financial timeline is right now.”

The article notes that 10 of the 26 members of the FTSE World Government Bond Index, which include Japan, Mexico, South Africa, and Spain, will default on their sovereign debt by 2050 if the efforts by governments to cut carbon emissions “are late, abrupt, and economically damaging.”

Darker Place?

A new study reports that climate change is making for a darker planet.

According to researchers with the American Geophysical Union, warming ocean waters are causing a drop in the brightness of the planet.

The researchers measured the “reflectance of the Earth” from Big Bear Solar Observatory between 1998 and 2017 by observing the earthshine.

The net sunlight reaching the Earth’s climate system depends on solar irradiance and the Earth’s reflectance, also known as the Earth’s albedo – the planet reflects roughly a third of the sunlight it gets.

They measured a global decline in the reflectance over the two decades of data.

The recent drop in albedo is attributed to a warming of the eastern Pacific, which the researchers say is “measured to reduce low-lying cloud cover.”

“The Earth’s albedo (or reflectance) is the fraction of shortwave solar radiation that it reflects back to space,” the study states. “It is an essential determinant of the earth’s climate, since, in the broadest sense, changes in climate arise from the simultaneous evolution of the solar intensity, the Earth’s albedo, and greenhouse insulation.”

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