The best of EcoWatch, right in your inbox. Sign up for our email newsletter!
First Major U.S. Insurer Begins Divestment from Fossil Fuels
It seems like every day there is a new story of a pipeline spilling crude oil or an oil refinery exploding. How do fossil fuel companies continue to operate such hazardous infrastructure in communities despite the immediate and long-term harm they cause? One piece of the answer is the coverage and financial support they get from insurance companies.
We may not immediately consider insurance as a key driver of climate change, but insurance companies provide a crucial service to dangerous fossil fuel projects: insurance coverage for everything from explosions to car accidents. But now, that may be changing.
Earlier this summer, Chubb, the largest commercial insurance company in the U.S., announced a new policy to address climate change. Saying that it "will not underwrite risks related to the construction and operation of new coal-fired plants," the company has become the first major U.S. insurer to adopt a policy restricting coal insurance.
According to the new policy, Chubb "will not underwrite new risks for companies that generate more than 30 percent of revenues from thermal coal mining … [and] will phase out coverage of existing risks that exceed this threshold by 2022."
This environmental victory follows a growing campaign that has been pressuring the insurance industry on climate change, building on the global divestment movement to pressure financial institutions to cut off their support of fossil fuels. With Chubb's announcement, in which the company said it "recognizes the reality of climate change and the substantial impact of human activity on our planet," the pressure is now on other major fossil fuel insurers in the U.S. like Liberty Mutual and AIG to follow suit and acknowledge the role they play in propping up the fossil fuel industry.
Insurers clearly understand the grave threat of climate change — and have for decades. As far back as the 1970s, they were among the earliest to acknowledge the changing climate. After all, insurers are in the business of risk management, and their mission centers on modeling catastrophe and pricing risk.
Yet, they have continued to protect and invest in the very companies and projects that are actively accelerating the climate crisis. In addition to covering the risk of fossil fuel projects, insurers take the money we pay for car, home and health insurance and use it to purchase stocks and bonds in fossil fuel companies.
This stunning hypocrisy grows starker each year. In the consecutive wake of record-breaking temperatures, wildfires, hurricanes and flooding, insurance companies are responding by increasing premiums and restricting coverage in areas prone to climate change impacts like wildfire-affected counties in California.
In addition, insurance companies are denying coverage to homes and businesses near these dangerous fossil fuel projects. An insurance company that is insuring a proposed oil pipeline in your community may deem your house uninsurable because of the risk of that pipeline.
There's just one word for this: perverse.
On the bright side, insurance companies have a financial incentive to change their practices because they're on the hook to pay for the damage that climate change is causing. Further, for most insurance companies, fossil fuel contracts only comprise a small percentage of overall profits, but the impact of major insurers ditching coal, oil and gas projects would be resounding.
As an individual customer of these companies, you can tell your insurance provider to step it up when it comes to climate change. To amplify your voice, you can organize with your neighbors or co-workers to get your city or business to demand that its insurance carriers stop supporting fossil fuels, just like San Francisco did in July 2018.
The insurance industry is rapidly shifting away from coal and tar sands, citing the major risks posed by climate change. As individuals, cities, businesses and organizations are making the laggards in the industry feel the heat of inaction, the message is clear: The industry must insure our future — not fossil energy that destroys the planet and our communities.
Elana Sulakshana is the energy and finance campaigner at Rainforest Action Network.
- Global Divestment Movement Celebrates Milestone: 1,000 ... ›
- Carbon Bubble Is Bursting as Divestment Takes Hold - EcoWatch ›
- Major Fossil Fuel Divestments Strengthen Renewable Energy ... ›
EcoWatch Daily Newsletter
A middle-aged married couple in China was diagnosed with pneumonic plague, a highly infectious disease similar to bubonic plague, which ravaged Europe in the middle ages, as CNN reported.
Dairy aisles have exploded with milk and milk alternative options over the past few years, and choosing the healthiest milk isn't just about the fat content.
Whether you're looking beyond cow's milk for health reasons or dietary preferences or simply want to experiment with different options, you may wonder which type of milk is healthiest for you.
At least 1,688 dams across the U.S. are in such a hazardous condition that, if they fail, could force life-threatening floods on nearby homes, businesses, infrastructure or entire communities, according to an in-depth analysis of public records conducted by the the Associated Press.
By Sabrina Kessler
Far-reaching allegations about how a climate-sinning American multinational could shamelessly lie to the public about its wrongdoing mobilized a small group of New York students on a cold November morning. They stood in front of New York's Supreme Court last week to follow the unprecedented lawsuit against ExxonMobil.
By Alex Robinson
Leah Garcés used to hate poultry farmers.
The animal rights activist, who opposes factory farming, had an adversarial relationship with chicken farmers until around five years ago, when she sat down to listen to one. She met a poultry farmer called Craig Watts in rural North Carolina and learned that the problems stemming from factory farming extended beyond animal cruelty.
Temperatures plunged rapidly across the U.S. this week and around 70 percent of the population is expected to experience temperatures around freezing Wednesday.