Today Insurance Commissioner
According to the financial data disclosed, insurers surveyed have
Since the announcement of Commissioner Jones' Initiative, insurers have already divested more than
"Investments in carbon -- oil, gas, coal -- face significant potential financial risk from climate change as governments, private companies, and markets continue to move to reduce the burning of carbon," said Commissioner Jones. "As a financial regulator, I want to make sure that insurance companies are invested in assets that retain value, not decrease in value, so that insurers have sufficient assets to pay claims. Requiring insurers to analyze and disclose their carbon investments allows regulators, investors, insurers, policyholders, and the general public to understand and address any potential climate risk associated with these investments."
As regulator of the largest insurance market in the nation, Jones launched the Climate Risk Carbon Initiative because of the potential for investments in coal, oil, gas and utilities burning carbon to become "stranded assets" on the books of insurers with little or no value as governments, private companies and markets may slowly or dramatically reduce the demand for carbon based fuels and their value drops. Jones is the first financial regulator to ask that a financial sector -- in this case insurance companies-- divest from thermal coal and to publicly disclose their holdings in oil, gas, coal and utilities, due to potential climate related risks. The Commissioner unveiled a new searchable online public database disclosing insurers' responses to his request that they divest from thermal coal and disclosing their investments in coal, oil, gas and utilities. The disclosures also may be used to enhance regulators' future in-depth financial analysis and financial examinations of individual insurance companies to further understand the potential climate risks associated with these investments.
"The volatility in energy prices over the past few years has demonstrated the hard way why fiduciaries like the insurance industry need to consider how climate risks might impact their fossil fuel holdings, particularly coal," said
"Climate change is real and it poses potentially significant financial risks to carbon investments, including those held by insurance companies. It is critically important that insurers, regulators and the public are considering and taking steps to understand and address these and other climate risks," Jones added.