A motion to develop a method of evaluating the city’s insurance providers based on the extent that they invest in fossil fuel operations was approved Wednesday by the Los Angeles City Council.
“It’s absolutely unconscionable how so many insurance companies are investing in and underwriting risky fossil fuel projects with zero thought about the climate or care for the wellbeing of future generations,” said Councilman Bob Blumenfield, who authored the motion.
“The time is now for the city of Los Angeles to seriously rethink which insurance companies are worth doing business with and which are out to make a quick buck on the expense of polluting our planet.”
Blumenfield cited a report that found the city is paying about $4 million each year in insurance premiums, many of which go to insurance companies that invest in fossil fuels.
With the motion, which is subject to Mayor Eric Garcetti’s approval, Los Angeles joins several other cities in evaluating insurers based on fossil fuels, including San Francisco and Paris.
According to Blumenfield’s office, the U.S. insurance industry invests about $90 billion in coal each year. While globally at least 26 insurance companies have ended their investment in fossil fuel projects and companies, the U.S. insurance industry has largely continued its investments.
Specifically, the approved motion instructed the City Administrative Officer Richard H. Llewellyn, Jr. to report within 30 days on an inventory of insurance policies held by the city and a method for evaluating the insurers based on their investment in fossil fuel operations.
It also instructed the CAO to report on options for how to use the evaluation method when choosing insurance companies.
“SoCal 350 Climate Action applauds this important first step towards making insurers accountable for safeguarding a livable and secure future. City insurers should not be in the business of financing and underwriting climate catastrophe,” said Rhonda Plank-Richard of SoCal 350 Climate Action, a Southern California organization focused on environmental justice.
Blumenfield worked with SoCal 350 Climate Action, along with the Neighborhood Council Sustainability Alliance and San Fernando Valley Climate Reality on the effort.
“The Neighborhood Council Sustainability Alliance’s Energy Committee applauds the City Council for recognizing that fossil fuels such as tar sands and coal are too risky to insure or invest in. Avoiding insurers entangled in these fuels helps protect the city’s finances and its environment. Widespread coal bankruptcies, ExxonMobil’s delisting from the Dow, and the write-off of its entire tar sands portfolio all illustrate how urgent today’s action is,” said Dan Kegal, chair of the Neighborhood Council Sustainability Alliance’s Energy Committee.