A coalition of NGOs, including the Sierra Club, the Waterkeeper Alliance, the Rainforest Action Network, and Greenpeace, has been putting pressure on certain industries to encourage renewable energy and end support of the fossil fuel industry for some time. The latest industry to be targeted is insurance based on the logic that while attempting to protect us from catastrophic risk, supporting the dirtiest fossil fuel industries is, instead, adding to worldwide climate change adverse risk.
These NGOs sent letters to the CEOs of 22 major US insurance companies, urging them to stop insuring projects of and to start divesting from companies that produce coal and those that extract and transport tar sands. These US insurers hold hundreds of billions of dollars in coal, oil, gas and electric utility stocks and bonds. Similarly, the letter requested that these major insurance companies underwrite and invest in more clean energy companies and projects.
In addition, these NGOs recommended that these insurance companies insist that all insured quantify the carbon footprint of their projects as a prelude to being insured. Campaign leaders claimed that several insurance companies have divested about $30 billion from coal companies and stopped or limited insuring the coal industry in recent years.
Climate change-caused or -enhanced incidents pose great risk to insurance companies. More than 10,000 claims were filed from the Carr and Mendocino fires, whose intensity were said to be contributed to by climate change, totaling $845 million in insured losses.
Insurance industry leaders, regulators, and business leaders acknowledge that climate change is a major strategic issue for the industry, and are beginning to be addressed in terms of their business model. As we see with the intense recent storms of Florence and Michael in the US, not to mention recent very deadly storms, tsunamis, and typhoons in Indonesia, the Phillipines, and India, there is an increase in the frequency and intensity of storms, and in particular, more rain, which has caused widespread flooding and destruction. The insurance industry is being hit hard by this increase in destruction and is being urged to take more steps to both add climate change to their risk equations and to take an active part in investing in a future to mitigate climate change.
CCES has the experience to help your firm cope with climate change, evaluate risk and protections for your business and asset, and reduce your carbon footprint. Contact us today at 914-584-6720 or at karell@CCESworld.com.