The Insurance Comptroller of New York City has delighted climate activists by writing to three major US insurers to urge them to refuse to cut their ties with the coal industry.
Scott M. Stringer has sent letters to the senior management at AIG, Liberty Mutual, and Berkshire Hathaway’s insurance division .In the letter Mr Stringer urged a cessation of underwriting coal projects and companies, as well as full divestment of “any holdings in companies that extract or distribute coal.” The letter to Liberty Mutual acknowledged the company’s existing coal policy but noted that it did not go far enough and called for a full severance of ties.
“We applaud Comptroller Stringer for pushing major insurers to take their role in the climate crisis seriously, ” said Elana Sulakshana, Energy Finance Campaigner at Rainforest Action Network. “Top fossil fuel insurers AIG, Berkshire Hathaway, and Liberty Mutual must stop providing a lifeline to the destructive coal industry. Liberty Mutual has taken a first step with piecemeal restrictions on coal insurance and investing, but a growing movement is demanding that Liberty strengthen its policy to meet the scale and urgency of the climate crisis, and we are thrilled to see Comptroller Stringer calling for the same.”
In addition to calling on the companies to end business relationships with the coal industry, Mr Stringer urged them all to evaluate the business risks of climate change to their industry and how their investments and underwriting across fossil fuel sectors only exacerbate those risks. “Clearly,” the letters say, “climate change poses an enormous risk to the world economy and to the long-term viability of insurance companies.”
The New York City Pension Funds, which are overseen by Mr Stringer, have over $155 billion (as of February 2020) in assets and have significant holdings in all three companies. He told company executives that investments in and underwriting of coal companies and projects are “simply incompatible both with your obligation to protect your clients from harm…and your responsibility to protect and create long-term shareholder value…” This is aligned with recent research from Moody’s Investor Service that found that insurers’ exit from coal was positive, reducing exposure to stranded asset risk as the value of the coal sector continues to decline.
“My family lost everything in superstorm Sandy. Climate disasters like Sandy will get far worse unless climate pollution is rapidly slashed. Yet companies like Liberty Mutual, AIG, and Berkshire Hathaway, who are supposed to provide insurance for people, are causing climate destruction that hurts all of us. And some, like me, much worse than others. That has got to stop,” said Rachel Rivera, a Sandy survivor and member of New York Communities for Change.
Climate advocates have turned their attention to the insurance industry in recent years, emphasising the significant role it has in enabling fossil fuel expansion through underwriting and investment, even as the effects of climate change threaten life, property, and the long-term viability of the insurance industry itself. New York is the second major US city to call on insurers to stop insuring and divest from coal, following a similar resolution passed by San Francisco’s Board of Supervisors in 2018.
“Insurance companies doing business in New York have invested hundreds of billions of dollars in fossil fuel companies, accelerating the climate crisis and endangering frontline communities in New York City and beyond. It is critical that New York City take decisive action and divest from companies that finance climate chaos. Comptroller Stringer’s pressing AIG, Berkshire Hathaway and Liberty Mutual to divest from coal is a welcome step forward for New York City,” said Andy Morrison, Campaigns Director at New Economy Project.