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US insurance companies fail proxy season’s climate test: Insure Our Future

7th June 2023 - Author: Saumya Jain

U.S insurance companies Chubb, The Hartford, and Travelers and their largest shareholders failed this proxy season’s climate test, according to pressure group Insure Our Future.

Concerned investors filed resolutions to address the climate and human rights-related risks associated with insurers’ underwriting, but none received majority support. At their annual general meetings this year, questions about companies’ plans to address climate change and shareholder proposals largely dominated the discussions although it failed to receive majority support.

The casual approach by insurers and their biggest shareholders was in direct contrast to recent warnings about the planet’s warming from the Intergovernmental Panel on Climate Change and the UN World Meteorological Organization.

Mary Sweeters, a spokesperson for Insure Our Future, said, “The short-term thinking by insurers and their biggest shareholders like BlackRock and Vanguard ignores significant long-term climate risks and is an affront to communities facing worsening climate impacts. These insurers are abandoning communities in the aftermath of extreme weather events that threaten their bottom line, but continue insuring the expansion of fossil fuels that is causing climate change. The biggest shareholders and proxy advisors aren’t holding insurers accountable. Campaigners and communities will step up their pressure, and it’s time for regulators to step in.”

The resolutions reflected investors’ concerns that mirror the growing scrutiny on insurers from elected officials, Indigenous communities, environmental, health, and human rights advocates, and insurance professionals who have urged insurers to address their contribution and vulnerabilities to climate change.

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The global property and casualty sector is moving away from fossil fuels, although the U.S. counterparts continue to lag behind their peers.

Until now, 15 insurers worldwide have adopted restrictions on underwriting new oil and gas projects. Travelers and The Hartford, in contrast, have made no such commitment. And while Chubb is the first U.S. insurer to adopt some restrictions on oil and gas underwriting, its policy is far from aligning with science and keeping global warming within 1.5°C.

At Chubb’s shareholder meeting, the company was questioned on its plans to expand its current oil and gas restrictions, while CEO Evan Greenberg acknowledged that was the plan but for which he declined to give a timeline.

Travelers’ general meeting in downtown Hartford, CT last week was the spot for local residents who were joined by leaders from the Gwich’in Nation. They had travelled from Alaska to speak to the company and urge management not to insure oil and gas development in the Arctic National Wildlife Refuge, the ancestral homelands of the Gwich’in people.
Bernadette Demientieff, the Executive Director of the Gwich’in Steering Committee, highlighted the longstanding efforts of the Gwich’in people in urging Travelers to commit to not insuring proposed oil and gas projects in the Coastal Plain of the Arctic National Wildlife Refuge at the rally.

Demientieff at the rally said, “To the Gwich’in, this region is known as Iizhik Gwats’an Gwandaii Goodlit or the Sacred Place Where Life Begins, “a beautiful and majestic place that has been their spiritual and cultural connection for thousands of years. We implore Travelers to respect the rights of the Gwich’in and protect the Arctic Refuge, ensuring that we can continue to live in harmony with the land bestowed upon us by the Creator. The Gwich’in will never allow the destruction of our homelands, and we will always safeguard our cherished ways of life.”

Tom Swan, the Executive Director of Connecticut Citizen Action Group said, “Insurers’ opposition to common sense climate-related proposals will cost shareholders and policyholders dearly. They are underestimating their risk of exposure to climate change while fueling future catastrophes through their underwriting and investment policies. The most egregious example of this is the way Travelers spent more time on opportunities from climate change than what they were doing to prevent it in their proxy statement.”

Mary Lovell, Energy Finance Campaigner RAN, said, “Insurers are harming communities through providing direct material support for oil and gas projects like methane gas expansion. US insurance policies have pipeline and explosive export facility shaped loopholes, the recent shareholder season shows that while climate is a top issue for insurers, these human rights violations will continue if left unchecked.”

Despite the outcomes of the shareholder meetings this year, advocates say they will continue to push for transformative change from U.S. insurers and ensure that they fulfil their responsibilities as society’s risk managers, and take tangible steps to safeguard the planet for future generations.

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