Climate change advocates tell insurers to halt underwriting of fossil fuel business
HARTFORD — Climate change activists are stepping up pressure against insurance companies to stop underwriting fossil fuel business, claiming one victory with a shareholder resolution as others fell short in committing insurers to do more.
The Hartford Financial Services Group Inc., Chubb and The Travelers Cos. Inc. faced calls at recent annual meetings to further restrict underwriting businesses that extract, transport or otherwise handle coal, tar sands, natural gas and other fossil fuels that contribute to greenhouse gas and the warming planet.
Ann Pratt, a Travelers shareholder, joined other protesters Wednesday outside the Marriott Hotel in Hartford where the insurer’s annual meeting was underway.
“They talk a good game, but we don’t see them stopping the spread of fossil fuels,” she said.
Two advocacy groups submitted shareholder resolutions urging stronger action against climate change.
Green Century Capital Management, an investment advisor to the Green Century Funds, which are fossil fuel-free mutual funds, proposed disclosure of new policies to help ensure that underwriting practices do not support new fossil fuel supplies to comply with the International Energy Association’s net zero emissions goal by 2050..
Travelers should define the scope, time frame and outlines of the policy, including defining “new fossil fuel supplies,” Green Century said.
Travelers urged shareholders to reject the proposal. It said it has a comprehensive strategy that considers climate-related risks in its underwriting, pricing and investment decisions, including not to underwrite new risks for construction or operation of coal-fired plants and companies that generate a significant portion of energy production from coal or that generate a significant portion of revenue from thermal coal mining or tar sands extraction.
As You Sow, a shareholder advocacy group, proposed that Travelers issue a report addressing if and how it will measure, disclose and reduce greenhouse gas emissions related to its underwriting, insuring and investment activities to comply with the Paris Agreement’s goal requiring net zero emissions.
Travelers also urged shareholders to reject the resolution. The proposal is unnecessary because Travelers says it publishes “robust reporting” and takes effective measures to identify and mitigate climate risks in its business.
Voting results were not immediately known Wednesday.
The Hartford Financial Services Group Inc. was targeted by a resolution offered by Green Century, proposing a resolution similar to what it submitted to Travelers.
Matthew Sturdevant, spokesman for The Hartford, said divestiture-first strategies are “not an effective path to net zero” and that the insurer is encouraged by the vote of confidence from shareholders in its approach.
“Our longstanding commitment to sustainability is demonstrated by our actions across the business, including sustainable products, transparent disclosure of climate-related goals, risks and operational impacts and investments in renewable energy,” he said.
At Chubb, a Swiss-based insurer, shareholders rejected a similar resolution by Green Century Capital Management that would have required the board of directors to adopt and disclose policies to help ensure that underwriting does not support new fossil fuel supplies. It received 19% of shareholder support.
“As a first year, it’s actually a pretty good showing,” said Andrea Ranger, shareholder advocate at Green Century Capital Management.
Another shareholder resolution submitted by As You Sow called on Chubb to issue a report addressing whether and how it intends to measure, disclose and reduce greenhouse gas emissions associated with its underwriting, insuring, and investment related to net zero emissions. It received 72% backing from shareholders.
The resolution is nonbinding, but Danielle Fugere, president and chief counsel of As You Sow, said most companies will respond even if just 25% of shareholders urge action. “Seventy-two percent is a very strong message that a company needs to take action,” she said.
Chubb urged shareholders to
reject both proposals.
“There is no magic bullet that will create a carbon free economy in the short term and the use of fossil fuels will unfortunately remain necessary during a transition period,” the company said. “Our underwriting, risk engineering, investment and philanthropic actions reflect this reality as Chubb seeks to accelerate the transition away from fossil fuels.”
Extreme weather events in 2021, including a winter freeze, floods, severe thunderstorms, heat waves and Hurricane Ida in Louisiana resulted in annual insured losses of about $105 billion from natural catastrophes last year, the fourth highest since 1970, according to Swiss Re Institute’s preliminary estimates.