More insurers in California divesting thermal coal assetsPosted On: Nov. 29, 2018 2:41 PM CST
The number of insurers operating in California pledging to divest some or all of their thermal coal investments has nearly doubled in two years, according to the latest data from state Insurance Commissioner Dave Jones.
Mr. Jones launched the Climate Risk Carbon Initiative in January 2016 to require insurers with $100 million in annual premiums doing business in California to disclose investments in fossil fuels and asked all insurers operating in the state to divest investments in thermal coal.
Mr. Jones asked insurers to divest from thermal coal because of the risk that thermal coal could become stranded assets on their books, meaning they have lost value amid regulatory, economic, physical or other changes, with 66 insurers agreeing to divest some or all of their thermal coal investments in 2016.
An additional 57 insurers have now committed to thermal coal divestments, according to the 2018 Climate Risk Carbon Initiative Coal Divestment Follow-up Survey released on Thursday.
“Climate change poses potential financial risks to insurers’ investments,” Mr. Jones said in a statement on Thursday. “The most recent results of our survey of insurers show that more insurers are divesting or committing to divest some or all of their thermal coal holdings and are considering the climate-related transition risks to these investments. While there is still more work to be done by insurers in this area, more are moving in the right direction.”
But insurers without existing thermal assets were more likely to pledge not to invest in such assets, while those with existing thermal coal assets were more reluctant to change their investment strategy, according to the survey, which included responses from 1,185 property/casualty and life insurers.