Insurance and Climate Change column

Climate Change Advocates Galvanized by Trump Decision

By | June 8, 2017

You’d think climate change activists now living under a new reality created by a U.S. president making good on his promise to withdraw the nation from the Paris accord on global warming would feel at least a bit vexed or marginalized.

Yes, can count them among the countless rancorous voices lamenting President Trump’s decision to pull out of the Paris agreement, but the folks at Ceres say they aren’t grieving and that they definitely don’t feel helpless.

Ceres, a sustainability advocacy group in Boston, Ma., believes Trump’s withdrawal in fact creates great opportunity with those who the president has said he’s protecting with the move: America’s business community.

“That’s the very constituency we’re seeing now stepping up and owning this and owning the responsibility for building a low carbon economy,” said Cynthia McHale, director of the Ceres insurance program.

McHale and Max Messervy, the insurance program manager at Ceres, shortly after Trump announced his decision said that they expect to see corporate and investor commitments to climate action to only grow stronger.

According to Ceres, The Hartford and Allianz are among 1,200-and-counting executives, firms and other entities signing a new “We Are Still In” initiative pledging to meet the goals of the Paris agreement.

The initiative, which has a website outlining the pledge and those making it, was coordinated by Ceres, as well as groups like the American Sustainable Business Council, Bloomberg Philanthropies, Center for American Progress, Climate Mayors, Environmental Defense Fund, Environmental Entrepreneurs, Sierra Club, We Mean Business and World Wildlife Fund.

Eric Garcetti, mayor of Los Angeles, and Bill De Blasio, New York City’s mayor, are on the list, as are states including California, Hawaii, New York, and Washington.

Names of businesses on the list include Adidas, Microsoft, Netflix, Patagonia, Starbucks and Tesla.

Efforts coming together on numerous fronts in the wake of the decision to leave Paris have given McHale and Messervy more encouragement in their ongoing efforts to get insurers to talk more about climate change and disclose their risks to climate change, they say.

It’s clearly a “turn a frown upside down,” “make lemons from lemonade,” and then “take the high road” form of rhetoric they’re offering up in the face of questions like “Isn’t this going to make things tougher for you?” followed by “You can’t be saying Trump’s decision doesn’t mean a thing?”

But they can easily backup their words with evidence that people who think something must be done to combat climate change are being galvanized by the Trump decision.

Goldman Sachs CEO Lloyd Blankfein last week used the first tweet he reportedly ever sent out to criticize Trump’s decision to back out of the Paris climate pact. Also last week, Tesla head Elon Musk and Disney’s Robert Iger quit Trump’s advisory councils citing his decision.

McHale and Messervy believe the uncertainty created by whether the U.S. public should continue working to combat climate change or if the nation should support Trump’s decision has enabled businesses, numerous public entities and myriad groups to step into the vacuum that has been created and to take action. Whereas under the previous administration, which clearly indicated its intention to wholeheartedly follow the accord, the incentive was more to follow than to act, they said.

One of Ceres most influential functions is amassing an insurer disclosure report every other year. The report, “Insurer Climate Risk Disclosure Survey Report and Scorecard,” evaluates the quality of responses from insurance companies in the annual National Association of Insurance Commissioners Climate Risk Disclosure Survey.

Putting together the report has McHale and Messervy reaching out to insurers nationwide to solicit information on practices and investments that some carriers would rather not share.

Will Trump’s decision, and the fact that the nation’s leader has been vocal in his negative feelings about combating climate change, make gathering this information tougher? And won’t certain carriers that have been reluctant to hand over this information now feel even less obliged to do so, or just not cooperate at all?

Messervy, of course, painted the glass as half-full on these points as well.

He believes public attitudes toward climate change will continue to steer businesses in all sectors toward greater transparency and continue to give them a more environmentally friendly bent.

“There is actually this amazing shift toward increasing disclosure and transparency over what companies are doing and are not doing related to climate risk,” Messervy said.

He believes pressure from shareholders to disclose climate related risks and investments will only grow more. In fact, Exxon Mobil shareholders at the end of May approved a proposal calling for the company to disclose the impact on its business of compliance with global climate change guidelines.

According to a Washington Post-ABC News poll, nearly six-in-10 people disagree with Turmp’s decision to withdraw from the Paris climate agreement. Nearly half of those polled believe it will cost jobs vs. 39 percent saying it will create jobs.

No doubt the Trump decision will have an impact that advocates like Ceres do not like. Under Obama, the terms “climate change” and “global warming” began to go from unspeakable dirty political words to becoming more socially accepted terms that could be used with little more than the risk of a heated personal debate on social media.

There’s a chance that such phrases may once again be regarded as the kind of political speak to be avoided at all costs.

McHale in the past has pointed out that the attitudes of U.S. insurers differ from their European counterparts when it comes to climate change. She has publicly stated that “U.S. insurance sector is reluctant to use the phrase ‘climate change,’ which is almost becoming silly.”

She couldn’t pinpoint any one reason for the past reluctance to use these phrases in the U.S.

“We’ve been asking that for years now,” McHale said.

Some insurers have told her that to use those words opens them up to climate or environmental litigation, others have told her there’s just no business benefit to talking about climate change (insurance companies don’t sell flood insurance). A few have said it’s a politicized issue in the U.S. and they don’t want to risk alienating policyholders.

“Absolutely the industry has been skittish on it,” she said. “Nowhere it seems to be more of an issue using the words ‘climate change’ than with the insurance industry.”

Neither McHale nor Messervy wanted to give their take on whether the Trump decision will make these the dirty words they once were.

Pressed for at least a few hard words on the Trump decision, McHale relented.

“Clearly it’s a mistake,” McHale said. “It’s a mistake for so many reasons, whether it’s the U.S. economy, or whether it’s the perception and understanding of the country’s global leadership and the respect for the United States, or whether it’s the wrong decision for the environment. I don’t think there’s any way to mince words on it. On any front, it was the wrong choice.”

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