The Hartford insurance group is the 4th U.S. insurer to restrict investment in fossil fuels in the last six months. All of them are aware they should account for weather and climate risks such as wildfires, floods or tornadoes which are the results of the climate crisis. The financial losses they cause will be huge. What measures has the PZU taken to avoid the climate catastrophe? The Polish insurer is still one of the biggest laggards...
Insurers and banks bow to progressives and divest from fossil fuels.
Climate crusaders are failing to persuade voters to limit fossil fuels, but they’re turning to coercion by other means. They’re having some success with U.S. banks and insurers that are caving to pressure to divest from carbon energy.
The Hartford insurance group last month announced it will no longer insure or invest in companies that generate more than 25% of their revenues from coal mining or more than 25% of their energy from coal. It will also black-list companies that generate more than a quarter of their revenues from drilling in Canada’s Alberta oil sands.
“As an insurer and asset manager we recognize the growing cost of this [climate] crisis, and we’re determined to use our resources and influence to address the challenge,” CEO Christopher Swift said. Hartford is the fourth U.S. insurer to restrict investment in fossil fuels in the last six months, and its announcement follows a coal divestment pledge by Liberty Mutual earlier in December.
Goldman Sachs also recently declared that it will no longer finance new coal mines, coal power plants or oil exploration in the Arctic. “Now other major U.S. banks, especially JPMorgan Chase —the world’s worst banker of fossil fuels by a wide margin—must improve on what Goldman has done,” the Rainforest Action Network (RAN) declared.
Property and casualty insurers like Hartford and Liberty Mutual should account for weather and climate risks such as California wildfires when underwriting policies. Banks also have an obligation to generate profits for their shareholders and customers. But financial institutions appear to be acting mainly to appease anti-carbon pressure groups.
Liberty Mutual announced its coal divestment pledge the same day it was lambasted by green potentate Bill McKibben in a Boston Globe op-ed. Progressive groups have especially targeted the Tar Sands and Arctic because of their rich oil reserves. But token fossil fuel sacrifices by financial institutions won’t satisfy absolutists like Mr. McKibben who want total divestment and all fossil fuels to stay in the ground.
“Hartford’s commitments [to divest from the Tar Sands] highlight the gaps in Liberty Mutual’s policy,” RAN declared, adding that its policy still “contains some critical loopholes.” Goldman “still lags behind its leading global competitors” and “remains far from alignment with what is needed to limit climate change to 1.5 degrees Celsius,” the group added. So much for the wages of climate appeasement.
After Goldman’s announcement, RAN warned the bank’s competitors: “A commitment from what is considered by its peers as the most prestigious investment bank on Wall Street to exit financing for thermal coal mining companies will accelerate coal becoming completely unbankable.”
Remember when progressives claimed that fossil fuels would be “stranded” investments as the world generates more energy from renewables? Why pressure financial institutions to divest from fossil fuels if they’ll soon become uneconomic? Apparently progressives want to make their false prophesy a fait accompli.
Not that the Chinese and Russians will abandon fossil fuels. Between 2016 and 2018, Chinese banks invested $82.8 billion—four times as much as U.S. banks—in coal mining and power. Russia’s Rosneft is developing a $160 billion oil project in the Arctic.
U.S. financial institutions won’t affect climate change by divesting from fossil fuels. They will help foreign competitors while hurting the U.S. economy and potentially undermining returns for shareholders.
