Insurers: NAIC’s Move to Amend Climate Disclosure Survey Too Quick

The National Association of Insurance Commissioners is moving to amend its climate disclosure survey – and insurers may not like it.

The Climate Risk Disclosure Survey is a voluntary risk management tool for state insurance

regulators to request from insurers disclosures each year of their assessment and management of climate-related risks.

In 2021, 15 states participated in the climate risk disclosure survey. That’s up from six states in prior years, according to the NAIC.

A newly revised survey responds to recommendations in 2021 from the Financial Stability Oversight Council for financial regulators to enhance supervision, data analysis, staff resources, and regulatory

cooperation related to climate risk. The recommendations included one to consider enhancing

public reporting requirements for climate-related risks in a way that builds on the core

elements of the Task Force on Climate-Related Financial Disclosure.

The American Property Casualty Association expressed concerned that the new survey requirements will place a burden on insurers that had previously been filing responses to the eight survey questions.

“For these companies, there simply may not be enough time or they may not have the resources to provide useful narrative responses as currently proposed, considering the internal governance process that will be needed for thorough responses,” David Snyder, vice president, international and counsel for APCIA, said in a statement

APCIA advocated for the new requirement to be phased in with any new requirements beginning in 2023, which would allow companies more time to provide responses.

Chubb

The U.S. Securities and Exchange Commission this week ruled in favor of a shareholder resolution filed by Green Century Capital Management calling on Chubb to stop underwriting new fossil fuel supply projects in line with the International Energy Agency’s Net Zero Emissions by 2050 Scenario.

The resolution is expected to be voted on at Chubb’s AGM in May.

Green Century filed similar resolutions at Travelers and The Hartford. All three insurers filed no-action requests.

The resolutions are part of a larger wave of shareholder activism against both fossil fuels companies and their financial backers.

“Today’s decision from the SEC shows the enormous risks that Chubb’s unchecked support of fossil fuel expansion poses to communities, the economy, and the company’s own shareholders,” Elana Sulakshana, senior energy finance campaigner at Rainforest Action Network, stated on behalf of the Insure Our Future campaign.

The campaign has called out Chubb in the past for a perceived failure to act.

Goldman

Goldman Sachs’ asset-management arm will take a harder line in voting on directors at companies that fail to disclose enough about their greenhouse gas emissions, an executive said, adding to the pressure on business leaders to provide more climate-impact data.

Starting with annual meetings to be held in spring at companies worldwide, Goldman’s $2.5 trillion asset management division will cast proxy votes against directors, often on the audit committee, who have oversight of emissions reporting and are not disclosing enough, according to a Reuters article on Insurance Journal.

The new policy treats climate data like the criteria Goldman set for boardroom diversity in December. Goldman said it voted against 7,661 directors worldwide last year.

Goldman for the last two years has engaged with 271 companies making insufficient emissions disclosures, and less than 100 of them have made no improvement, making directors vulnerable, Reuters reported.

A U.S. Securities and Exchange Commission rule unveiled Monday calls for more corporate emissions disclosures.

Global Electricity

An independent, not-for-profit think tank reported this week that wind and solar, the fastest growing sources of electricity, reached a record 10% of global electricity in 2021.

Ember’s third annual Global Electricity Review shows solar generation rose 23% last year, and wind by 14%.

Highlights of the report include:

• 10% of the share of global electricity in 2021 was from wind and solar
• There are 50 countries that get more than a tenth of electricity from wind and solar
• The share of global electricity from clean power in 2021 reached 38%
• Demand for electricity rose 5%

The report paints a rosy picture for green energy, but also notes that overall energy demand has kept coal a viable energy source.

“Governments like the US, Germany, UK and Canada are so confident in clean electricity that they are planning to shift their grid to 100% clean electricity within the next decade and a half,” the report states. “But with coal still rising and electricity demand continuing to increase, all governments with carbon intensive grids now need to act with that same boldness and ambition.”

Past columns:

• Moody’s ESG Notes ‘Death and Destruction’ from Climate Change
• Report: Nearly a Third of U.S. Hazardous Chemicals Facilities Exposed to Climate Change Dangers
• Climate Change Could Push Flood Losses in U.S. to $40B by 2050
• NASA: Earth’s Temperature in 2021 Was 1.5 Degrees F Above Baseline
• Nearly 8-in-10 Executives Believe World Is at ‘Climate Change Tipping Point’