Why Insurance

What does the insurance industry have to do with climate change?

You can’t drive a car or buy a house without insurance. Likewise, without insurance, energy companies cannot build or operate destructive fossil fuel projects like the Trans Mountain pipeline, coal-fired power plants, oil drilling in the Arctic, or gas export facilities and pipelines.

U.S. insurers are propping up fossil fuels

They provide insurance for fossil fuel projects. 

As the ultimate manager of risk, the insurance industry quietly shapes modern society, deciding what type of projects can be built and operated. Insurance coverage allows for new carbon-intensive projects such as coal plants and tar sands mines. Once built, fossil fuel infrastructure locks us into dirty and expensive energy that is causing climate change and harming public health.

They invest billions into fossil fuel companies.

Insurance companies invest customers’ premiums in fossil fuel companies – that is how they make money. U.S. insurers have over US $582 billion invested in fossil fuels, with almost US $90 billion in coal alone.

Insurers know the risks of global warming, yet they insure and invest in the companies causing it

Insurers were among the earliest voices warning about the risk of runaway climate change, which makes their support of fossil fuels particularly hypocritical.

Insurers were warning about the risks of climate change as early as the 1970s. Yet they continue to provide coverage for the companies and projects driving global warming. At the same time, they are dropping clients in areas prone to extreme weather events like wildfires and hurricanes. Millions are at risk of losing their home insurance in California alone.

The U.S. insurance industry lags behind its global peers

Most major insurance companies worldwide restrict insurance for the companies and projects driving global warming.

Since 2015, nearly 40 insurers worldwide have restricted coverage for coal projects. Yet U.S. companies provide a lifeline to fossil fuel projects around the world. While six major North American insurers have coal exit policies, these are significantly weaker than the policies of their European peers. No U.S. company has restricted insurance for conventional oil and gas.

U.S. insurers are undermining global climate efforts

The International Energy Agency (IEA) concluded that there is no room for any fossil fuel expansion in a 1.5°C pathway, while the 2021 Production Gap report makes clear that oil and gas production globally needs to drop by 3-4% annually. As society’s risk managers, insurers have an obligation to help avoid climate breakdown–and the power to help drive the transition to clean energy.

Learn more about our campaigns to stop insuring the unacceptable.