Insurance giant Travelers has adopted a new climate policy committing not to underwrite new coal-fired power plants. The insurer has also committed not to underwrite new policies or make new investments in companies that generate more than 30% of their revenue or energy production from coal or have more than 30% of their reserves in tar sands. Travelers will also phase out existing relationships that exceed these thresholds by 2030.
Environmental advocacy groups lauded the step.
“Adopting a coal and tar sand exclusion policy is a notable first step from Travelers,” said Tom Swan, executive director of Connecticut Citizen Action Group. “The insurance industry is being forced to wake up to the threat posed by climate change, and to its roles and responsibilities. There is real momentum now for insurance companies in the US to align their policies with climate science and end support for fossil fuels.”
Travelers was one of the last major insurance companies without any restrictions on coal underwriting, according to Insure Our Future, a US coalition of advocacy groups. Travelers now joins a growing list of at least 35 insurers globally that have ended or limited coverage for coal projects – including all major European insurers and most Asian insurers. Travelers is the third North American insurer and the 14th insurer globally to restrict insurance for the tar sands oil sector.
“Travelers’ decision to rule out tar sands insurance is a further indication that insurance companies are increasingly recognizing the high risk profile and significant reputational risks that come with insuring this outdated, dangerous and polluting industry,” said Melina Laboucan-Massimo, just transition director for Indigenous Climate Action and a Lubicon Cree from the Alberta tar sands. “Tar sands have had devastating impacts on our drinking water, air, Indigenous rights, and our shared climate. The door closing on tar sands would be a major win for impacted communities like mine.”
Insure Our Future said that Travelers’ move will increase the pressure on AIG and Berkshire Hathaway to rule out coal, as they are the only two major US insurers that still have no restrictions on underwriting coal. It will also up the pressure on Chubb and Liberty Mutual to include tar sands in their own fossil fuel restrictions, the group said.
“Travelers’ announcement further isolates AIG as one of the last insurers willing to provide coverage for coal and tar sands,” said Hannah Saggau, insurance campaigner for Public Citizen. “AIG’s CEO, Peter Zaffino, has yet to take the steps needed to restrict the company’s coverage for and investments in the industries destroying our planet. AIG needs to get with the climate program and stop insuring coal, tar sands, and all fossil fuel projects.”
Despite Travelers’ new policy, climate groups said the insurer still had a long way to go.
“While we welcome Travelers’ updated climate commitments, the policy has significant loopholes and falls well below the standard set by leading European insurers,” said Samantha Dynowski, director at the Sierra Club’s Connecticut chapter. “Travelers does not rule out support for all companies that are developing new coal and tar sands projects that the climate cannot afford. Furthermore, it leaves the door open for the insurer to renew existing coal and tar sands insurance contracts until 2030. The time to act is now, not in eight years.”
The policy also does not address Travelers’ ongoing insurance and investments in conventional oil and gas expansion, Insure Our Future said. Travelers is one of the top three insurers of oil and gas companies worldwide. The insurer has also not ruled out insuring oil and gas drilling in the ecologically sensitive Arctic National Wildlife Refuge, which is sacred to the Gwich’in and other Indigenous peoples in the region. There has been widespread corporate commitment not to finance or insure drilling in the refuge, Insure Our Future said.
