San Francisco becomes first US city to push insurance industry to stop insuring coal and tar sands
Today, the San Francisco Board of Supervisors became the first municipal body in the United States to call upon insurance companies to stop insuring and investing in fossil fuels, citing the need to address climate change and the enormous toll climate pollution inflicts on public health and the economy.
The resolution, approved unanimously by the San Francisco Board of Supervisors, urges the City of San Francisco to screen potential insurers for investments in coal and tar sands and to cut ties with any insurance company that continues to insure dirty energy projects. The city’s initial focus is on coal and tar sands oil as they are particularly damaging to the climate, economy and public health.
"Cities have nothing to gain from collaborating with insurance companies that prioritize dirty energy companies over communities. Like so many areas around the country, the Bay Area is already feeling the impacts of climate change, from horrific wildfires to rising sea levels. San Francisco can’t afford to do business with companies that fuel climate change. We encourage all cities committed to climate action to join us.”
Insurance companies make dirty energy infrastructure projects possible by insuring and investing in risky projects and companies. The 40 largest U.S. insurers hold a combined investment of over $450 billion in coal, oil, gas and electric utilities. US insurance companies also play a critical role in insuring coal-fired power plants, tar sands pipelines and other fossil fuel infrastructure that lock the U.S. into decades of dirty and expensive energy that accelerates climate change. Meanwhile, insurance companies are abandoning communities that are at risk of climate catastrophe, such as not renewing homeowner policies in wildfire zones.
The resolution comes just weeks before San Francisco hosts climate leaders from around the world at the Global Climate Action Summit this September.
"Insurance companies are investing in and insuring the very industries which are making climate change worse. If insurance companies want to protect us from catastrophic risk, they must break ties with the fossil fuel industry. The Global Climate Summit is the perfect opportunity for insurance companies to step up and pledge to stop supporting an industry that is bad for business.”
With natural disasters responsible for more economic losses every year, the insurance industry understands the threat of climate change well. Last year, the Northern California wildfires generated $9 billion in insurance claims, and the hurricane season was the most costly ever, racking up more than $200 billion in damages.
Insurance companies, particularly in Europe, are already responding to this threat. Since 2015, 17 large insurers have divested about $30 billion from coal companies. In addition, five of the largest insurers have stopped or limited insuring coal, and two of them have stopped insuring new tar sands projects. To date, no leading major U.S. insurer has taken similar action. San Francisco joins Paris in pressuring insurance companies to break their ties with dirty energy; earlier this year, the Paris city council passed a similar declaration.