A number of businesses within the U.S. insurance sector are trying to weaken or delay emerging climate-related insurance regulation at federal and state levels, according to climate think tank InfluenceMap.
Research from the group released on Thursday reportedly shows that despite many insurers publicly acknowledging the need to act on climate, their industry associations have been pushing the opposite message to policymakers.
“There’s a striking disconnect between what major insurance companies are publicly saying about climate change risks and what their industry associations are telling policymakers,” InfluenceMap Sustainable Finance Analyst Cleo Rank said in a statement.
The group’s research focuses on four industry associations that have reportedly engaged with various climate-related insurance policies: the American Property Casualty Insurance Association (APCIA), the American Council of Life Insurers (ACLI), the National Association of Mutual Insurance Companies (NAMIC), and the Reinsurance Association of America (RAA).
Media representatives for all four organizations were reached out to for comment. ACLI has seen the report but is still reviewing it.
APCIA issued a point-by-point response countering InfluenceMap’s assertions in the report, which the group said “mischaracterizes the insurance industry’s approach to climate-related financial regulation.”
“APCIA and our members take climate change very seriously and continue to take steps to help reduce consumer’s potential for loss,” David Snyder, vice president, policy, research, and international division for APCIA, said in the response.
NAMIC issued a response attributable to Erin Collins, senior vice president of state and policy affairs, that states the group understands the importance of all kinds of risks of all kinds, it has been concerned with extreme weather since it inception, and focuses its attention on disaster recovery, resiliency, and regulatory initiatives that assist consumers.
“These initiatives make real impacts on lives and communities,” the statement continues. “InsuranceMap’s press release suggesting that the industry is not responsive to climate is simply false. The insurance industry is tackling the mitigation of risk on behalf of their policyholders every day.”
The RAA responded to the media request for comment with filings filled with climate change comments and actions it made with the Securities and Exchange Commission last year, and RAA’s Guiding Principles to Address Climate Change. The RAA in its letter to the SEC stated it supports “climate change disclosures that adequately inform investors about known material risks and uncertainties,” and it supports disclosures that would provide greater consistency.
According to the InfluenceMap’s research shows the pushback has been effective in delaying or watering down some proposals:
- Lobbying by all four associations successfully delayed and weakened aspects of the National Association of Insurance Commissioners (NAIC) 2022 redesigned Climate Risk Disclosure Survey.
- In 2022, APCIA lobbied against a bill in California that would require insurance companies to disclose investments in and underwriting of fossil fuel-related entities. The Insurance Committee declined to hold a hearing on the bill, effectively killing it for the legislative session.
- There were instances where negative industry lobbying has been unsuccessful. For example, a bill in Connecticut requiring insurers to disclose fossil fuel investments and exposure to climate risk, and guidance in New York which directs insurers to incorporate climate risk considerations into governance and decision-making.
100 Big Companies
Representatives from more than 100 large companies and investors are meeting with U.S. lawmakers this week to press Congress to pass an ambitious package of federal clean energy, transportation, infrastructure, and advanced manufacturing investments.
Among the major U.S. employers spanning all sectors of the economy that are participating in what has been dubbed “LEAD on Climate 2022” are: Best Buy, bp America, eBay, Gap, General Mills, HP, IKEA, Levi Strauss & Co., LinkedIn, Nestle, Marriott International, Microsoft, Netflix, Nike, PayPal, PepsiCo, Salesforce, Siemens, Starbucks, Unilever and Wayfair.
Representatives from the organizations plan to meet with lawmakers and Congressional staff on in virtual forums. So far, 90 meetings have been scheduled over this two-day period, according Ceres, the sustainability nonprofit organizer of the meetings.
In April, nearly 50 major reporting at least $200 million in annual revenue urged lawmakers in a joint letter to pass an economic package with massive investments into clean energy projects.
The fourth annual business advocacy event gives companies and investors the opportunity to make an economic case for federal climate action, elevating calls for clean energy and environmental justice investments.
Specifically, companies and investors are calling for Congress to:
- Meet the urgency and scale of the climate crisis with ambitious federal investments to accelerate the transition to affordable, secure, domestic clean energy.
- Seize the economic opportunities to lead the world in clean energy manufacturing and deployment to create jobs, spur innovation, strengthen supply chains, and reduce costs and volatility for businesses and consumers.
- Tackle inequity by targeting climate and clean energy investments in disadvantaged, rural, and frontline energy communities.
Climate and Ukraine
Decarbonization must be accelerated despite a focus on energy security in the wake of Russia’s invasion of Ukraine, leading climate envoys said on Wednesday.
Ahead of United Nations climate talks in Egypt in November, the war on Ukraine has led some countries to speed up their shift to renewables but others to call for a pause.
U.N. climate envoy Mark Carney urged delegates at a recent City of London Corporation conference to not allow the conflict to hold back the global effort to reduce carbon emissions, a Reuters article this week on Insurance Journal states.
“We know the climate doesn’t care why emissions happen, only how much occur,” Carney stated. “The more we emit now, the more radical action will be needed later. We need to speed up, not slow down.”
Carney chairs the Glasgow Financial Alliance for Net Zero, a group of financial institutions that have pledged to help meet a goal of net-zero emissions by 2050.
U.S. climate envoy John Kerry also called for the Ukraine war to drive a quicker shift to renewables, according to Reuters.
“It is absolutely critical that we recognize that we can’t allow energy to be weaponized in the way that President Putin has tried to weaponize it,” Kerry stated.
Climate Change and Southwest
A ProPublica report to better understand how climate change is and will continue to affect the Southwest showcases three climate change experts talking about drought and falling water levels, wildfires, and more.
The report, for example, seeks a connection between climate change and wildfires are burning near Santa Fe, New Mexico, while the Boulder, Colorado, area is still feeling the effects of a fire that burned a developed area in the dead of winter.
“We make the extremes worse,” said David Gutzler, a professor at the University of New Mexico’s Earth and Planetary Sciences department. “That’s a bit different than saying a wildfire is caused by climate change. As temperatures rise, hot temperature-related extreme events are likely to become more frequent and more severe, and that’s exactly what we’re seeing across the West right now.”
Gregg Garfin, a climatologist at the University of Arizona, had a dour outlook about the Colorado River’s historically low flow and how the region’s river systems might be shaped in the future by climate change.
“We’re seeing less snow-covered area, less water content in the snowpack, early runoff in the late winter and early spring at elevations lower than around 7,000 feet, an increased fraction in the precipitation that we get coming as rain rather than snow and reduced soil moisture,” he said. “All of these things combine to reduce the efficiency of runoff.”
Mikhail Chester, a professor in Arizona State University’s engineering school and the director of the Metis Center for Infrastructure and Sustainable Engineering, said the way in which we build may be one of the biggest impacts on the Southwest from climate change:
“The problem — from my perspective as an engineer who studies infrastructure — is the rigidity of everything we’ve built out. … For the past century we’ve gotten away with these design assumptions that things can be rigid, can be based on a future that is largely predictable. Here we are in the future saying that doesn’t seem to be the case. We need a lot of flexibility.”