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
By Allegra Kirkland, Jeremy Deaton, Molly Taft, Mina Lee and Josh Landis
Climate change is already here. It's not something that can simply be ignored by cable news or dismissed by sitting U.S. senators in a Twitter joke. Nor is it a fantastical scenario like The Day After Tomorrow or 2012 that starts with a single crack in the Arctic ice shelf or earthquake tearing through Los Angeles, and results, a few weeks or years later, in the end of life on Earth as we know it.
Air pollution particles that a pregnant woman inhales have the potential to travel through the lungs and breach the fetal side of the placenta, indicating that unborn babies are exposed to black carbon from motor vehicles and fuel burning, according to a study published in the journal Nature Communications.
Teen activist Greta Thunberg delivered a talking-to to members of Congress Tuesday during a meeting of the Senate Climate Change Task Force after politicians praised her and other youth activists for their efforts and asked their advice on how to fight climate change.
The University of California system will dump all of its investments from fossil fuels, as the Associated Press reported. The university system controls over $84 billion between its pension fund and its endowment. However, the announcement about its investments is not aimed to please activists.
By Ngozi Okonjo-Iweala
World leaders have a formidable task: setting a course to save our future. The extreme weather made more frequent and severe by climate change is here. This spring, devastating cyclones impacted 3 million people in Mozambique, Malawi and Zimbabwe. Record heatwaves are hitting Europe and other regions — this July was the hottest month in modern record globally. Much of India is again suffering severe drought.
By Mark Hertsgaard
The United Nations Secretary General says that he is counting on public pressure to compel governments to take much stronger action against what he calls the climate change "emergency."