Insurance Companies Must Do More to Mitigate Climate Change
Insurance companies talk a big game about what they’re doing to address the climate crisis, but let’s be clear – they are aiding the continuation and expansion of our fossil fuel dependency.
After pension funds, the insurance industry is the world’s second largest institutional investor. Insurers operating in Connecticut are some of the biggest investors in fossil fuel companies in the world. The top 30 insurers operating in Connecticut had over $221 billion invested in fossil fuels when last reported. On top of that, property and casualty insurers are also providing insurance for fossil fuel projects. By continuing to enable fossil fuel projects and companies to grow, the insurance industry is enabling the climate crisis.
That’s why we have been calling on insurers in Connecticut to act. We are calling on insurers to:
Immediately cease insuring new and expanded coal, oil, and gas projects.
Immediately cease insuring coal companies, unless they have a coal exit plan that commits to close all coal-related assets by 2030 in EU/OECD countries and by 2040 globally.
Phase out, in line with a 1.5ºC pathway, insurance for oil and gas companies.
Divest all assets, including assets managed for third parties, from coal, oil, and gas companies that are not aligned with a 1.5ºC pathway. Any company that is building new coal, oil, or gas expansion projects is not aligned with 1.5ºC.
5. Bring stewardship activities, membership of trade associations and public positions as a shareholder and corporate citizen in line with a 1.5ºC pathway in a transparent way.
6. Establish robust due diligence and verification mechanisms to ensure clients fully respect and observe all human rights, including the right to Free, Prior and Informed Consent (FPIC) as articulated in the UN Declaration on the Rights of Indigenous Peoples.
We are part of a national movement pressing for change and we are making a difference. Over the last 18 months, Sierra Club Connecticut, along with other Connecticut organizations led by the Connecticut Citizen Action Group, have urged Connecticut insurers, regulators, and decision makers to align insurance policy with the science of climate change. This pressure has resulted in new policies to regulate the industry here in Connecticut, and nationally has coal companies scrambling to find insurance.
As a hub of the insurance industry, Connecticut plays a major role in the direction of the industry. We will continue to apply pressure on the companies to make these changes and on decision makers to hold insurers accountable. If you are interested in getting involved, please let me know.
Samantha Dynowski is State Director of Sierra Club Connecticut.