Washington, DC (September 17, 2020)—Nearly 60 businesses from across the country issued a statement today calling on the US insurance industry to stop insuring and investing in the fossil fuels driving climate change. Signatories include Ben & Jerry’s, Aspen Skiing Company, Burton Snowboards, Patagonia, Bigelow Tea, and Seventh Generation.
This marks the first time that business policyholders have publicly called on US insurers to drop coal, oil, and gas. Amid growing attention to the role of global finance in the climate crisis, US insurers like Liberty Mutual and AIG have come under increased scrutiny from the public sector, Indigenous Peoples, and NGOs for underwriting damaging oil pipelines and coal mines. The statement comes in the lead-up to New York Climate Week during a year of record-breaking natural disasters in the US.
“When you’re trying to put out the fires, you don’t invest in lighter fluid–but that’s exactly what insurance companies investing in fossil fuels are doing. They’re accelerating risk, when businesses expect them to reduce it. And financial markets increasingly recognize the contradiction,” said Thomas Oppel, Executive Vice President at American Sustainable Business Council, who organized the letter with Green America and Insure Our Future.
“Patagonia recognizes that businesses can play a key role in combating the climate crisis through their financial decisions. By choosing to work with insurance partners who have committed to not insuring the fossil fuel industry, especially the most harmful sectors like coal, tar sands, and Arctic drilling, businesses send a powerful message that can help sway the industry from continuing to support the drivers of climate change,” said Yvonne Besvold, Vice President of Finance and Treasurer at Patagonia, one of the signatories. “We think it’s time for the US insurance industry to stop insuring fossil fuels and actively support solutions to the climate crisis.”
Coal, oil, and gas infrastructure can’t operate without insurance. While many European insurers have policies reducing or ending support for fossil fuels, US companies largely continue to support them, even though they make up only a small percentage of premiums. For example, coal—the single biggest contributor to global warming—accounted for less than 1% of AIG’s 2019 premiums. The UN has warned that we have less than 10 years to transition off fossil fuels if we are to prevent climate catastrophe, and a recent report from the US government finds that climate change poses a major risk to the stability of the US financial system.
“The decision to continue to support the fossil fuel sector is in direct contradiction to the action necessary to mitigate the climate crisis and to the economy’s long term financial stability,” the statement reads, citing government projections that global warming will shrink the US economy up to 10 percent by the end of the century.
“As insurance customers, we are therefore expressing our desire for insurance coverage in the US market that isn’t tied to supporting fossil fuels and actively supports renewable energy,” it continues. The companies committed to working to align their operations with their sustainability commitments—including through their choice of insurance companies.
“While the financial sector is increasingly aware of the profound risks inherent in the climate crisis, it hasn’t taken the necessary action. Insurance companies need to halt underwriting and investing in fossil fuels and support renewable energy now,” said Fran Teplitz, director of Green America’s Green Business Network.
“In recent weeks the US has faced severe heat waves, deadly wildfires, and a hurricane bearing likely ‘un-survivable’ storm surges. The climate science is crystal clear: we MUST keep fossil fuels in the ground. US insurance companies must immediately stop underwriting and investing in fossil fuels,” said Kate Ogden, Advocacy and Movement Building Manager at Seventh Generation, one of the signatories.
Dropping fossil fuels makes both environmental and economic sense
“Solving climate change is about starting things and stopping others. We need to start up a clean energy economy. Simultaneously, we need to stop pulling fossil fuels out of the ground. And the way to do that is to restrict both financing and insurance,” said Auden Schendler, Senior Vice President of Sustainability at Aspen Skiing Company, a signatory. “This is not a radical argument, because fossil investments are proving to be financial and moral losers anyway.”
Renewables are increasingly cheaper than coal, and the COVID-19 pandemic has accelerated losses already underway in the oil and gas industry, putting a growing number of installations at risk of becoming “stranded assets” as demand drops. Fossil fuels are also losing value fast: seven of the world’s top oil firms have downgraded assets by US$87 billion this year.
Climate change-driven disasters also threaten insurer balance sheets. In 2018, disasters like floods, wildfires, and earthquakes caused over US$160 billion in damages; US$80 billion of this was insured. Cambridge University predicts that losses will triple over the next 30 years if climate change continues unabated.
Businesses call on US insurers to join their global peers in combating climate change
The statement applauds the 19 major insurance companies, primarily in Europe and Australia, who have limited or ended coverage for fossil fuels, primarily coal and/or tar sands. While four major US companies have policies—Chubb, Axis Capital, the Hartford, and Liberty Mutual—all continue to underwrite fossil fuels. For example, Chubb and Liberty Mutual insure the environmentally disastrous Trans Mountain pipeline over the protests of Indigenous Peoples.
“We recognize the opportunity this presents for the US insurance industry to join their global peers. We would therefore strongly support similar or stronger efforts from US insurers to address their own underwriting and investments in fossil fuels,” the statement reads.
One of the signatories of the statement is itself an insurance company—Lemonade Insurance—which committed at its founding to never invest in fossil fuels and has called on its industry peers to join them in their efforts to address climate change.
“Back in 2018, Lemonade was the first U.S. insurer to commit to not invest in fossil fuels. Beyond its impact on climate change, to be paying for the damages of wildfires, hurricanes, and other climate disasters while simultaneously funding the very industries that are responsible for some of the worst of those damages, simply didn’t make sense to us,” said Yael Wissner-Levy, Vice President of Communications at Lemonade.
“We rely on the insurance industry to help bring about a better, more reliable future for us,” said Marie Venner, President of Venner Consulting and one of the signatories. “It is utterly immoral and unethical to be underwriting or investing in fossil fuels, for people now or in the future. Our lives depend on stopping this.”
Businesses that would like to sign onto the statement can do so here
The American Sustainable Business Council (ASBC) is the leading business organization serving the public policy interests of responsible companies, their customers and other stakeholders. Founded in 2009, ASBC’s membership represents over 250,000 businesses in a wide range of industries. ASBC advocates for policy change and informs business owners, policymakers and the public about the need and opportunities for building a vibrant, broadly prosperous, sustainable economy.
Green America is a national membership organization dedicated to harnessing economic power—the strength of consumers, investors, businesses, and the marketplace—to create a socially just and environmentally sustainable society. Green America’s Green Business Network includes thousands of businesses s home to both rising social and eco enterprises and the most established green businesses around. We provide the tools, the information, and the consumer base to help you thrive in today’s competitive green marketplace.
Insure Our Future in the US is a campaign comprised of environmental, consumer protection, and grassroots organizations holding the US insurance industry accountable for its role in the climate crisis. We are part of the global Insure Our Future campaign, which promotes a rapid shift of the insurance industry away from supporting and financing fossil fuels to accelerating the transition to a clean energy economy.