The Hartford Insurance Group (HIG) has joined a rising chorus of insurance and reinsurance companies who are hitting back against climate change by boycotting coal miners and tar sands oil extraction companies.
Hartford cited “extreme weather” caused by climate change and global warming as the reason for the decision to divest holdings and cease doing business with coal companies. Christopher Swift, Hartford’s Chairman and CEO, said the adverse impact climate change is having on people’s lives and businesses led to the company’s decision.
Mr. Swift also referenced the impact extreme weather may have on the share price of Hartford, stating “As an insurer and asset manager we recognize the growing cost of this crisis, and we’re determined to use our resources and influence to address the challenge.”
Hartford Adds to Global Insurance Movement
In taking this step, Hartford becomes another in a long line of insurers who have used the power of their business platform to address global warming. Earlier in 2019, Chubb (CB) announced they would divest investment holdings and cease doing business with companies that received over 30% of their revenue from coal mining or supplying coal-fired electricity.
Chubb became the first major insurer to sign onto the U.N.’s global compact, “Business Ambition for 1.5℃”. The compact cites the need, and ability, to limit global warming to 1.5 degrees celsius above pre-industrial levels.
In addition to Chubb, Hartford Insurance is joining several other European insurers, reinsurers, and sovereign wealth funds who have already cut ties with coal and tar sands focused companies. European insurers have been ahead of the curve in this area, with Germany’s Allianz and Italy’s Generali both announcing they would be cutting ties with coal companies in 2018.
With Hartford’s announcement, the number of global insurance companies who have announced such a policy now stands at 18.
The impact of the new policy on Hartford’s stock price should be muted, as the lost business will be phased out through 2023. The new policy prevents Hartford from taking on new business in underwriting, or investing in, the construction or operations of new coal-fired plants.
But, Hartford will continue to cover employees of coal and tar sands companies who have insurance policies, such as life or disability, with Hartford. The policy states these types of policies are covering people, as opposed to the activity of the companies in question, and that these business lines at Hartford will not be affected.
Steven Adams’s personal position in Hartford Insurance Group: none.
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