But policy falls short of U.S. and global insurance peers
Liberty Mutual published a new policy on coal insurance and investing today. The announcement comes as the global climate movement is increasingly turning its focus on the insurance industry as a major driver of climate change. Increasing protests and media coverage of the industry’s central role in perpetuating the climate crisis have led to Liberty Mutual joining the growing ranks of insurers reducing their support for the fossil fuel industry.
Liberty Mutual is among the world’s top six coal insurers and has billions invested in fossil fuel companies and utilities. With today’s announcement, it becomes the eighteenth global insurer to adopt restrictions on coal insurance.
Rainforest Action Network (RAN) Energy Finance Campaigner Elana Sulakshana said:
“In response to a groundswell of public pressure, Liberty Mutual has taken a first step towards reducing its role in fueling the climate crisis. But the company still lags far behind what the science says is necessary, and does not match best practice among U.S. and global peers.”
“Just today, in an op-ed in the company’s hometown paper, the Boston Globe, author Bill McKibben asked: “Where is Liberty Mutual in the climate change fight?” With this new policy, we have an answer: it is just out of the starting gate, but still has a long way to go. Liberty Mutual should expect to stay in the public spotlight until its policies and practices truly meet the urgency of the climate crisis.”
“While Liberty Mutual’s new policy sets out strong restrictions on insuring coal companies, it apparently does not rule out covering new coal-fired power plants or coal mines from companies with less than a 25% stake in coal. This is a major loophole because to keep warming below 1.5ºC, the science is clear that the climate cannot withstand any new coal projects.”
“Liberty Mutual must strengthen its policy to clearly rule out insuring any new coal mines or power plants, fully phase out coal across all insurance and investment activities in line with 1.5ºC, and stop insuring the destructive tar sands sector.”
Kukpi7 Judy Wilson, secretary treasurer of the Union of British Columbia Indian Chiefs and Chief of the Neskonlith Indian Band, said:
“Liberty Mutual’s restrictions on coal are a first step, but the company is supporting Indigenous rights abuses by refusing to rule out the tar sands sector. The Trans Mountain tar sands pipeline expansion is the epitome of risk: for Indigenous land rights, our water, and the climate.”
“Trans Mountain and other proposed tar sands projects have not secured the Free, Prior, and Informed Consent of impacted First Nations, who are leading powerful resistance. Liberty Mutual and other insurers should take note, as the companies that continue to cover tar sands will be targets for our movement.”
Liberty Mutual’s announcement follows months of pressure from Rainforest Action Network, Mothers Out Front, 350 Massachusetts, 350 Seattle, and other climate and consumer organizations that make up the Insure Our Future campaign.
According to the press release announcing the new policy, Liberty Mutual will not insure new risks for companies with more than 25% exposure to coal and will phase out existing coverage to such companies by 2023. It will also end new investments in companies that generate at least 25% of their revenue from coal mining or produce at least 25% of their power from coal.
Liberty Mutual joins 17 global insurers that have already restricted or eliminated insurance coverage for and investments in coal, including U.S. peers Chubb and AXIS Capital. The shift away from coal is accelerating, with more than half of these policies adopted in 2019, a recent report revealed. Liberty Mutual’s announcement will increase the pressure on AIG, one of the few remaining major insurance companies with no restrictions on underwriting coal.