Green Century has taken aim at a new bill from Texas state legislator Bryan Hughes seeking to limit the ability of insurance companies in considering environmental risks in their underwriting.
In a March 24 statement, Green Century Funds President Leslie Samuelrich argued against what she described as a “completely inappropriate” bill, stating that it violates free market principles.
The Texas bill would limit the ability of insurance companies operating in the state to consider environmental risks as determinative factors when underwriting property and casualty risks.
“It’s completely inappropriate for legislators to direct how insurance companies identify and calculate risk,” said Samuelrich. “Removing environmental risk factors from consideration means that insurers could no longer consider how climate change affects their underwriting decisions and could adversely impact their bottom lines. It violates free market principles and good old-fashioned common sense to restrict companies’ abilities to address their own material risks.”
Green Century also said Hughes sent a letter to a number of key insurers asking if their shareholders have requested a halt to insurance coverage of companies involved in the fossil fuel sector in the past five years. The letter is also understood to have asked if insurers have been required to track or reduce greenhouse gas (GHG) and sought detailed information on third parties used to advise carriers about ESG risk factors.
“We’re one of the shareholders who are asking insurers to phase out underwriting of new fossil fuel supply because we see climate change as a long-term financial risk –to us, and insurers alike. Our focus is on curbing expansion of fossil fuel supply – whose emissions the world can no longer absorb.”
Green Century also noted that despite the Texas legislator’s concerns about oil and gas insurance exclusions, the state is leading the way for renewable energy production in the U.S., currently producing around 19% of its electricity from renewable sources.