Climate change activists are using insurance companies to stop insuring companies that use or produce fossil fuels.
On Dec. 13, 2019, insurer Liberty Mutual announced a new policy that restricts coal insurance and investing.
Just two months after activists launched a campaign against Liberty Mutual for the company’s role in fueling the climate crisis, the insurer has announced a new policy restricting coal insurance and investing.
The news comes as the global climate movement sweeps across the insurance industry. Numerous protests and media coverage have placed immense public pressure on some of the world’s largest insurers to abandon policies that perpetuate climate change. According to the Union of Concerned Scientists, coal is considered the single biggest contributor to global warming.
According to a news release, Liberty Mutual stated that it will not insure new risks for companies with more than 25% exposure to coal; will phase out existing coverage to such companies by 2023; and will end new investments in companies that generate at least 25% of their revenue from coal mining or produce at least 25% of their power from coal. The company also appointed its first chief sustainability officer, Francis Hyatt, who will lead the company’s Office of Sustainability and oversee environmental, social and governance (ESG) issues and initiatives.
“We are committed to being a responsible global corporate citizen with a focus on environmental sustainability, supporting the transition to a low-carbon economy and investing in companies that show proven progress in this evolution,” Hyatt said in a statement. “We understand the shift from coal to clean energy is a journey, and we recognize the role the insurance industry plays in supporting that evolution for our customers. Now more than ever, it’s crucial that companies take an active role in advancing their ESG agendas, and I look forward to partnering with internal and external stakeholders around the world to help drive positive impact in society.”
This new policy makes Liberty Mutual, which has $8.9 billion invested in fossil fuel companies and utilities, the third U.S.-based insurer and 18th global insurer to adopt restrictions on coal coverage and investments.
Rainforest Action Network’s (RAN) Energy Finance Campaigner Elana Sulakshana, who participated in a staged protest outside Liberty Mutual’s New York City office in October, said in a statement: “In response to a groundswell of public pressure, Liberty Mutual has taken a first step towards reducing its role in fueling the climate crisis. But the company still lags far behind what the science says is necessary, and does not match best practice among U.S. and global peers … While Liberty Mutual’s new policy sets out strong restrictions on insuring coal companies, it apparently does not rule out covering new coal-fired power plants or coal mines from companies with less than a 25% stake in coal … Liberty Mutual must strengthen its policy to clearly rule out insuring any new coal mines or power plants, fully phase out coal across all insurance and investment activities in line with 1.5ºC, and stop insuring the destructive tar sands sector.”
