L.A. becomes largest city to join the call for insurers to drop fossil fuels
LOS ANGELES, CA (March 3, 2021)—Today, the Los Angeles City Council unanimously passed a motion authored by Councilmember Bob Blumenfield to evaluate prospective insurance companies based on their underwriting and investment in fossil fuels.
According to a recent report, the City of L.A. is paying nearly $4 million in annual insurance premiums, many of which are going to insurance companies that are fossil fuel underwriters and investors. By taking a step to evaluate prospective insurers based on their fossil fuel business, L.A. becomes the largest city to adopt such a policy, following Boulder County, Colorado; San Francisco, California; Cambridge and Sommerville, Massachusetts; and Paris, France. The motion will now go to the Mayor for signature.
“It’s absolutely unconscionable how so many insurance companies are investing in and underwriting risky fossil fuel projects with zero thought about the climate or care for the wellbeing of future generations,” said Councilmember Bob Blumenfield. “The time is now for the City of Los Angeles to seriously rethink which insurance companies are worth doing business with, and which are out to make a quick buck on the expense of polluting our planet.”
Climate change has had a significant impact on insurance for Californians: in recent years, insurers in California dropped coverage for hundreds of thousands living in wildfire risk areas until a moratorium was put into effect by Insurance Commissioner Ricardo Lara.
At the same time, U.S. insurance companies continue to back the fossil fuels driving the climate crisis by providing the insurance they need to operate. The insurance industry is also a major institutional investor in fossil fuel companies; U.S. insurers alone have US $90 billion invested in coal. Globally, at least 26 insurance companies have ended or limited their coverage for fossil fuel projects and companies, mainly in the coal sector, but U.S. companies largely continue to support fossil fuel expansion worldwide.
Blumenfield’s motion instructs the City Administrative Office (CAO) to inventory the insurance policies held by the city, and to develop a method for evaluating insurers based on their investment and underwriting in companies engaged in fossil fuel operations that “pose the greatest harm to the environment, including coal mining, tar sand drilling, and pipeline transport.”
The motion also instructs the CAO to request the Airport, Water and Power, and Harbor departments to report in 90 days with options for how to use this evaluation method to choose companies from which to purchase or renew insurance. The motion is supported by community impact statements from 11 neighborhoods.
SoCal 350 Climate Action Lead Member Rhonda Plank-Richard said, “SoCal 350 Climate Action applauds this important first step towards making insurers accountable for safeguarding a livable and secure future. City insurers should not be in the business of financing and underwriting climate catastrophe.”
U.S. insurers have come under increased scrutiny from the public sector, businesses, Indigenous Peoples, and NGOs for their role in underwriting fossil fuel projects worldwide including harmful oil pipelines and coal mines. Fossil fuels are the primary driver of climate change, and a recent study found that they directly caused 8.7 million premature deaths annually from 2012 to 2018.
Councilmember Blumenfield worked hand-in-hand with advocates across the City of LA and with Insure our Future to gain support for this measure. “I’d like to give a huge thanks to the Insure Our Future campaign and the several local groups I’ve worked with on this effort, including SFV Climate Reality, the Neighborhood Council Sustainability Alliance, SoCal350 Climate Action, and so many others who have tirelessly pushed for this to be heard in Neighborhood Council meetings and advocated for it to be heard by the City Council for the past year. This is a first step, but a huge win,” Councillmember Blumenfield said.
Dan Kegel, chair of the Neighborhood Council Sustainability Alliance’s Energy Committee, said, “The Neighborhood Council Sustainability Alliance’s Energy Committee applauds the City Council for recognizing that fossil fuels such as tar sands and coal are too risky to insure or invest in. Avoiding insurers entangled in these fuels helps protect the city’s finances and its environment. Widespread coal bankruptcies, ExxonMobil’s delisting from the Dow, and the write-off of its entire tar sands portfolio all illustrate how urgent today’s action is.”
Kathy Schaeffer, Legislative Coordinator of the San Fernando Valley Climate Reality Project said, “The San Fernando Valley Chapter of the Climate Reality Project is pleased that the City of Los Angeles has taken an important environmentally conscious and fiscally responsible step towards being powered by 100% renewable energy. Where wildfires and drought continue to be the norm, rather than the exception, we must look for insurers that do not invest in, or underwrite the fossil fuel industry.”
Michael Parada, Communications Manager at Climate Resolve, said “The role of insurance is to protect life and property. Yet, when insurance companies invest or provide coverage to fossil fuel companies then insurance is actually harming what it intends to protect. Moreover, climate change is adversely affecting insurance companies’ bottom-line. Witness the billion of dollars in losses from California’s fires in 2020. Climate Resolve applauds the Los Angeles City Council for helping the insurance industry reckon with their harmful practices.”
Councilmember Bob Blumenfield proudly represents the West San Fernando Valley on the LA City Council, including the communities of Canoga Park, Reseda, Tarzana, Winnetka and Woodland Hills.
SoCal 350 Climate Action empowers Southern California communities to join together for environmental, social, and economic justice.
Climate Resolve is a Los Angeles-based 501(c)(3) tax-deductible nonprofit organization, founded in 2010, that focuses on local solutions to global climate change, and works to achieve outcomes that bestow multiple benefits. We work to make California more equitable, just, livable, prosperous, and sustainable today and for generations to come by inspiring people at home, at work, and in government to reduce climate pollution as well as prepare for climate impacts.
Founded by Nobel Laureate and former US Vice President Al Gore, The Climate Reality Project is working to catalyze a global solution to the climate crisis by making urgent action a necessity across every level of society. With a global movement more than 5 million strong and a grassroots network of trained Climate Reality Leader activists, we are spreading the truth about the climate crisis and building popular support for clean energy solutions.
The Neighborhood Council Sustainability Alliance advances sustainability and resilience across Los Angeles through advocacy, sharing of best practices, and community action.
Insure Our Future in the U.S. is a campaign comprising environmental, consumer protection, and grassroots organizations holding the U.S. insurance industry accountable for its role in the climate crisis. It is 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.
Jake Flynn, (310) 663-3770, (213) 473-7003, [email protected]
Jamie Kalliongis, (314) 651-7497, [email protected]