8/31/2018 San Francisco May Screen Insurers for Their Fossil Fuels Investments

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San Francisco May Screen Insurers for Their Fossil Fuels Investments
By Don Jergler (https://www.insurancejournal.com/author/don-jergler/) | July 26, 2018

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Article (https://www.insurancejournal.com/news/national/2018/07/26/496064.htm)

37 Comments (https://www.insurancejournal.com/news/national/2018/07/26/496064.htm/?comments)

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The San Francisco Board of Supervisors has become what is believed to be the first U.S. municipal body to try to force insurance
companies to stop insuring and investing in fossil fuels.

The board on Tuesday voted unanimously in favor of a resolution to urge the city to screen insurers for their investments in coal and
tar sands – and other U.S. cities could join San Francisco if backers of the resolution have their way.

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8/31/2018 San Francisco May Screen Insurers for Their Fossil Fuels Investments

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The resolution, titled “Urging Divestment by Insurance Companies From Coal and Tar Sands Industries,” was introduced by
Supervisor Aaron Peskin. The resolution comes as the city prepares to host climate leaders from around the world at the Global
Climate Action Summit in September.

It’s unclear which if any carriers now doing business with the city will be affected by the board’s vote. Calls to the city’s Office of Risk
Management and spokespersons for the board weren’t immediately returned.

The Paris City Council earlier this year passed a similar declaration, while other cities have made efforts to stem climate change.

In New York there’s the proposed Climate and Community Protection Act, which would commit the city to being powered by 100
percent renewable energy (https://www.insurancejournal.com/news/national/2018/04/12/486350.htm) by 2050. The act, which has
passed through state Assembly, would also mandate that at least 40 percent of state energy funds are invested into vulnerable
communities, as well as creating labor protections for workers in the renewable energy industry.

Passage of the San Francisco resolution has garnered relatively scant news coverage so far, instead being eclipsed by the board’s
vote at Tuesday’s meeting to block stores, restaurants and bars in the city from selling plastic straws.

The Sunrise Project, a supporter of the insurer screening resolution, plans to take similar proposals to other city councils around the
nation.

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“We’re really going be looking, particularly at cities in California, but we’ll be looking nationally,” said Ross Hammond, senior advisor
with the Sunrise Project. “We definitely have a plan to roll this out all over the United States over the next few months.”

Telling insurers how to invest doesn’t make a lot of sense, said Mark Sektnan, vice president of the Property Casualty Insurers
Association of America.

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8/31/2018 San Francisco May Screen Insurers for Their Fossil Fuels Investments

“This is another example of a political agenda that disregards the fundamentals of risk management,” Sektnan said. “Policymakers
should focus on insurers’ solvency and consumer protection. Insurers review investments regularly and constantly analyze the risk
and quality of their portfolios to manage solvency. This analysis includes all risks, including those that may be related to climate
change.”

Pressure to get insurers to stop doing business with fossil fuel concerns has mounted over the last few years from advocacy groups,
as well as regulators.

California Insurance Commissioner Dave Jones has often voiced his wish that insurers divest from coal, including establishing the
Climate Risk Carbon Initiative (https://www.insurancejournal.com/news/west/2017/01/18/439211.htm). The initiative includes
information on the amount of oil, gas, coal and utilities investments held by insurance companies, and whether the insurers have
divested from thermal coal, the amount of thermal coal divested and any future commitments to divest.

A number large insurers, mostly in Europe, have already began to take actions to divest.

According to the Sunrise Project, 17 large insurers have divested roughly $30 billion from coal companies since 2015. In addition,
five large international insurers – Allianz, AXA, SCOR, Swiss Re and Zurich – have stopped or limited underwriting coal projects, and
AXA and Swiss Re have also stopped or limited underwriting tar sands projects.

Swiss Re announced earlier this month it no longer is providing reinsurance to businesses with more than 30 percent exposure
(https://www.insurancejournal.com/news/international/2018/07/03/494073.htm) to thermal coal across all lines of business. The
policy applies to existing and new thermal coal mines and power plants, and is implemented across all lines of business and Swiss
Re’s global scope of operations.

Allianz says it’s further integrating ecological and social responsibility into its core business
(https://www.insurancejournal.com/news/national/2018/04/12/486350.htm), and has been in the process of making investments of
more than 5.6 billion Euros ($691 billion) in renewable energy, with a portfolio that includes 81 wind farms and seven solar farms in
Europe and the U.S.

Supporters of getting the insurance industry out of fossil fuels say insurers make “dirty energy” infrastructure projects possible by
insuring and investing in these projects and the companies behind them.

“It makes no sense for them to be investing in and underwriting the very industries which are causing accelerated climate change,
which is increasing in the insurance claims that have to be paid out,” Hammond said.

Past columns:

Survey Shows More Americans Believe There is ‘Solid Evidence’ of Global Warming
(https://www.insurancejournal.com/news/national/2018/07/12/495062.htm)
Sea Level Rise Puts $117.5B at Risk from Chronic Flooding
(https://www.insurancejournal.com/news/national/2018/06/21/493040.htm)
NOAA Expects Sea Level Rise to Produce Record Coastal Flooding This Year
(https://www.insurancejournal.com/news/national/2018/06/07/491586.htm)
Professor Says Window to Prevent Dangerous Impacts from Climate Change Closing Fast
(https://www.insurancejournal.com/news/national/2018/05/24/490300.htm)
Allianz Expanding Climate Strategy, Doesn’t Want to Insure Coal Operations
(https://www.insurancejournal.com/news/national/2018/05/10/488933.htm)

Interested in Climate Change?

Get automatic alerts for this topic.

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Categories: National News (https://www.insurancejournal.com/news/national/) Topics: California Insurance Commissioner Dave Jones
(https://www.insurancejournal.com/topics/california-insurance-commissioner-dave-jones/), Climate Change (https://www.insurancejournal.com/topics/climate-change/), Climate
Control (https://www.insurancejournal.com/topics/climate-control/), fossil fuel divestment (https://www.insurancejournal.com/topics/fossil-fuel-divestment/), Property Casualty
Insurers Association of America (https://www.insurancejournal.com/topics/property-casualty-insurers-association-of-america/), San Francisco Board of Supervisors
(https://www.insurancejournal.com/topics/san-francisco-board-of-supervisors/), Sunrise Project (https://www.insurancejournal.com/topics/sunrise-project/)

Have a hot lead? Email us at newsdesk@insurancejournal.com (mailto:newsdesk@insurancejournal.com)

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Featured Comment
Craig Cornell says: JULY 26, 2018 AT 12:11 PM (EDIT) (HTTPS://WWW.INSURANCEJOURNAL.COM/WP/WP-ADMIN/COMMENT.PHP?ACTION=EDITCOMMENT&C=4859347)

Fossil fuel companies should do everything possible to boycott San Francisco. WELL-LOVED. LIKE
OR DISLIKE:
Close all the gas stations. Shut off natural gas pipelines. Force Tesla drivers to stop using electrical energy derived from coal, which is their primary source of
41 9
electricity. Instead of getting taxpayer subsidies to pretend they are helping to stop Climate Change, force Tesla drivers to pay extra for solar and wind energy.

Using the legal system to punish political enemies is out of control. Thanks Liberals!

Latest Comments
PolarBeaRepeal says: AUGUST 1, 2018 AT 8:20 PM (EDIT) (HTTPS://WWW.INSURANCEJOURNAL.COM/WP/WP-ADMIN/COMMENT.PHP?ACTION=EDITCOMMENT&C=4862752)

None of those Euro insurers are US based, so they're adversely affected by Socialist Liberal thinking by top government officials.

PolarBeaRepeal says: AUGUST 1, 2018 AT 8:18 PM (EDIT) (HTTPS://WWW.INSURANCEJOURNAL.COM/WP/WP-ADMIN/COMMENT.PHP?ACTION=EDITCOMMENT&C=4862751)

You falsely credit "all" euro insurers with intelligent decision making re: the Global Warming Hoax. But "apparently" is your escape clause. The reasons for such BoD
decisio... read more (/news/national/2018/07/26/496064.htm?comments#comment-4862751)

PolarBeaRepeal says: AUGUST 1, 2018 AT 8:14 PM (EDIT) (HTTPS://WWW.INSURANCEJOURNAL.COM/WP/WP-ADMIN/COMMENT.PHP?ACTION=EDITCOMMENT&C=4862750)

Is there human feces in abundance in Texas city streets?

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