Our new scorecard, Insuring Coal No More, for the first time holds leading insurance companies to account for their policies on coal and climate change. It finds that major insurers have divested an estimated $20 billion from the coal sector and are in some cases ceasing to underwrite coal projects. All actors need to move away from fossil fuels more aggressively, and many insurance companies particularly in the U.S. have so far not taken any action on coal at all.
On November 15 I had the chance to launch our new report at the conference, Insurance and Climate Risk, an event organized by the trade journals Environmental Finance and Insurance ERM in London. In my presentation I recognized the important role which insurers had played as early warners about climate risks but made it clear that their support for coal projects was a blind spot in their approach to climate change, and was incompatible with their stated support for the goals of the Paris Agreement.
I told the insurers that we would inform their customers and employees about their track record on coal, and would call out early movers and laggards on climate change and coal in public. In fact, activists with the Coal Action Network and Divest London organized actions at insurance offices on the morning of the conference, giving a cautious thumbs-up to Lloyd’s of London, which has announced but not yet adopted its divestment from coal, and an energetic thumbs-down to US insurance giant AIG, which has so far not taken any action on coal.
To my surprise my presentation did not meet with the silence or even hostility that I had encountered in discussions with other financial institutions. Our report was met with a lot of respect and acknowledgment not just from environmental staff but also senior managers of the insurance industry at the sold-out event. Unsurprisingly some insurance representatives found that their companies had been scored too harshly in comparison with their competitors. Most acknowledged that they had to do more, and assured me that they were in the process of considering further action on coal. A senior executive of an energy insurer politely pointed out a minor error in one of our tables (meanwhile corrected), and assured me his colleagues would call him to find out about the report as soon as they were up.
Throughout the day, several insurance managers referenced coal as an example for the unfinished agenda of their industry regarding climate change. “We want to do more of the good stuff [clean energy] and less of the bad stuff [coal]”, one senior underwriter commented drily on the future direction of his company. The chief risk officer of a global insurance company correctly pointed out that the climate challenge was much broader than coal, and that insurers needed to be part of a comprehensive transition to a low-carbon future. The director of an international insurance association happily informed me that many large national insurers, which we had not covered in our scorecard, had divested their assets from coal as well. Other participants offered useful tactical advice for our future campaign.
In the coming weeks we will disseminate our scorecard widely and will follow up on the numerous recommendations which we have received. Our campaign network will get together to take stock of the progress achieved and discuss future strategies in early December. We will certainly continue to recognize further progress in the process of making coal uninsurable, and will call out the laggards, many of which did not bother to attend the London conference. Stay tuned!