Hartford, CT (May 31, 2022) – Last week, Travelers faced an unprecedented challenge from investors with two climate resolutions on the ballot at the company’s annual general meeting (AGM) on May 25.
More than 55% of shares voted in favor of a resolution filed by As You Sow requesting the company to report on if and how it plans to measure, disclose, and reduce its emissions associated with underwriting and investment activities in alignment with the Paris Agreement’s 1.5ºC goal, in opposition to management’s recommendation on the proposal.
The other climate resolution, filed by Green Century Capital Management, called on the insurance giant to stop underwriting new fossil fuel supplies, in line with the International Energy Agency’s net zero roadmap; It earned 13% of the vote..
During the meeting, the company faced questions from Kimberly Reindl, a youth leader with Sunrise Movement Connecticut and Friar Washabaugh of St. Mary Church and St. Peter and Paul Church in Norwich, CT.
Outside of the meeting, the local organizations Connecticut Citizen Action Group and Sierra Club CT organized a protest, calling on Travelers investors to stop underwriting fossil fuels and vote in favor of the two climate resolutions. Approximately 30 local residents and climate activists rallied in front of the Marriott Hotel holding signs and banners, chanting “Insure our future, not fossil fuels” and “Travelers has a gas problem!” A 10 foot banner that read “Travelers Stop Insuring Fossil Fuels” was also dropped from a parking garage across the street.
“Investors have issued a clear mandate for climate action at Travelers, and the pressure on the insurance giant – and other U.S. insurers – to minimize its contribution to the climate crisis continues to mount. However, while these votes represent a clear signal from investors, it is disappointing that major shareholders, such as BlackRock and Vanguard, have likely failed to hold Travelers accountable for its massive fossil fuel business. We will keep the pressure on, alongside shareholders, until Travelers commits to ending support for fossil fuel expansion.”
In January 2022, advocates noticed that Travelers quietly updated its 2021 sustainability policy to phase out underwriting of and to divest from some coal and tar sands by 2030. Despite this, the company still lags significantly behind its industry peers on concrete action to decarbonize its investment and underwriting portfolios.
It is one of the top insurers of the oil and gas industry and has adopted no formal policies to limit support for (non-tar sands) oil and gas projects or companies. By contrast, ten major insurers have policies restricting insurance for new oil and gas projects, and thirteen insurers have adopted restrictions on insuring oil and gas drilling in the Arctic National Wildlife Refuge. For its lack of action regarding Arctic oil and gas, Travelers has come under increasing scrutiny from Indigenous leaders in the Arctic.
“The votes at the AGM are a clear cry for Travelers to take action. But Travelers still continues to dismiss the voice of the Gwich’in people of the Arctic. By continuing to ignore our concerns, which are valid ones. We are asking them to protect the Arctic Refuge and address the decline of our homelands (eco-systems) because of climate change which we all obviously know is fueled by fossil fuels. They are contributing to the pain and stress our communities are experiencing.”
The bigger trend:
This year has seen unprecedented action from shareholders and shareholder advocates, who filed multiple resolutions at insurers in addition to Travelers, including The Hartford, Chubb, and Berkshire Hathaway, and made recommendations against company directors at Chubb for failing to adequately address the business risks associated with climate change. Notable institutional investors announced their support ahead of the meetings; in late April, New York State Comptroller Tom DiNapoli announced the intent of the $279 billion NYS Common Retirement Fund to vote in favor of the climate shareholder proposals.
Mounting regulatory scrutiny of the threats to insurers from—and their contributions to—climate change are some of the material risks faced by insurance companies that investors are watching. As regulators increase climate supervision of insurers, those that continue to underwrite and invest in fossil fuels may be required by regulators to bear higher compliance costs, hold greater levels of capital, or divest from risky assets at disadvantageous prices.