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Chubb Ltd. shareholders on Thursday rejected a proposal that would have limited the insurer’s ability to underwrite new fossil fuel supplies but approved a proposal requiring the company to produce a report on greenhouse gases associated with its insurance and investment activities.
The company’s board had recommended that shareholders reject both proposals.
Several global insurers, including Chubb, had previously restricted underwriting related to the coal power industry, but environmental groups have pressed for more measures.
The proposal limiting Chubb’s insurance of new fossil fuel supplies was submitted by Green Century Capital Management Inc., which runs an investment fund that considers environmental, social and governance concerns in making investment selections.
The proposal, detailed in filings with the U.S. Securities and Exchange Commission, asserted that Chubb’s insurance of policyholders affected by climate-driven catastrophes and its coverage of the fossil fuel industry were “fundamentally incompatible.”
While acknowledging that Chubb had previously restricted coverage for new coal-fired plants and limited investments in coal, its efforts “are not sufficiently aligned,” the proposal stated.
In recommending shareholders vote against the proposal, Chubb said it recognized the threat of global warming and the need to move away from reliance on fossil fuels but said a transition period was necessary.
“There is no magic bullet that will create a carbon-free economy in the short term, and the use of fossil fuels will unfortunately remain necessary during a transition period,” the Chubb board said.
The proposal requiring Chubb to report on whether and how it intends to measure, disclose and reduce greenhouse gas emissions associated with its underwriting and investments was submitted by As You Sow, an environmental advocacy group.
In recommending that shareholders vote against the proposal, Chubb’s board said such a report would be duplicative of a climate-related disclosure report it already releases.
“The board and management will consider what additional reporting will be appropriate in response to the shareholder proposal,” Chubb said in a statement.
The insurance sector’s coverage of fossil fuel projects has come under increased scrutiny. On Thursday, it was reported that March LLC is arranging insurance coverage for a controversial African oil pipeline that several major banks and insurers are distancing themselves from.