Insurance and Climate Change column

Report: Nearly a Third of U.S. Hazardous Chemicals Facilities Exposed to Climate Change Dangers

By | March 3, 2022

A report from the Intergovernmental Panel on Climate Change stating that climate change is leading to increasingly irreversible impacts, with a narrowing window to adapt to it, is garnering a lot of reaction.

The IPCC Working Group II report: Climate Change 2022: Impacts, Adaptation and Vulnerability, states that many of the “impacts and consequences of climate change are harming people and ecosystems around the world,” including extreme weather, flooding, drought, wildfires, heat waves and sea-level rise.

Several groups put out statements in the wake of the report.

Nicolette Bartlett, chief impact officer of the CDP, a not-for-profit that runs the global disclosure system for investors, companies, and governments to manage their environmental impacts, called the report a “stark depiction of escalating climate impacts” and that she hopes it lights “a fire under governments and corporates in the high-emitting economies most responsible for climate change.”

According to the statement, corporate disclosures to CDP “show a steady increase in the number of companies disclosing potential substantive litigation risks, almost quadrupling since 2018,” and climate litigation cases have soared in recent years.

“We expect this, and other risk disclosure- such as physical damage, compliance costing and insurance- to only increase in the next few years, as the impacts of climate change become clear, more measurable, evidence of a lack of action mounts and calls for accountability continue to increase,” the statement continues.

The Natural Resources Defense Council issued numerous responses, including a positive take away from Sameer Kwatra, director of the India program:

“Good work is already happening on resilience at the state and local level. Most states in India have developed heat action plans, cities are installing cool roofs, villages are implementing green village plans, and front-line communities are working towards adaptation and implantation of the tools they need to mitigate against climate change. Coordinated adaptation efforts such as Heat Action Plans cited in the IPCC report can alleviate adverse effects of extreme weather events.”

Vijay Limaye, a senior scientist in the NRDC’s Science Office, commented on the report’s mention of a growing body of evidence tying climate change to health costs, and the repercussions across institutions, businesses, and communities:

“Whether it’s farming, forestry, fisheries, tourism, or outdoor labor—a hotter planet is…more dangerous and difficult to work in, and costlier for businesses to operate because of compounding supply chain problems and transportation infrastructure disruptions that threaten worker well-being. ”

Hazardous Facilities

The U.S. Governmental Accountability Office has found that neary one-third of facilities that make, use, or store hazardous chemicals are located in areas with certain natural hazards, such as wildfires and storm surges, risks that may be worsened by climate change.

The GAO also found that the Environmental Protection Agency, which regulates these facilities, “doesn’t consistently assess how these facilities are managing risks from natural hazards and climate change.”

The findings recommend that the EPA provide more direction for facilities on including climate change risks in their programs.

The EPA’s Risk Management Plan Rule requires certain facilities that make, use, handle, or store hazardous chemicals develop and implement risk management programs to detect and prevent the consequences of an accidental release. These facilities include chemical manufacturers and water treatment plants.

“Federal data on flooding, storm surge, wildfire, and sea level rise—natural hazards that may be exacerbated by climate change—indicate that over 3,200 of the 10,420 facilities we analyzed, or about 31 percent, are located in areas with these natural hazards,” the GAO report states.

According to the GAO, 11,000 RMP facilities across the nation have “extremely hazardous chemicals in amounts that could harm people, property, or the environment if accidentally released.”

“Risks to these facilities include those posed by natural hazards, which may damage the facilities and potentially release the chemicals into surrounding communities,” the report continues. “Climate change may make some natural hazards more frequent or intense, according to the Fourth National Climate Assessment.”


American International Group said this week it is committing to net-zero greenhouse gas emissions within its underwriting and investment portfolios by 2050, according to an article on Insurance Journal.

The commitments follow years of pressure from environmental groups.

AIG said it will also phase out existing underwriting and investments in companies by Jan. 1, 2030 with 30% or more of revenue from coal or oil sands, or 30% electricity generated from coal.

“AIG is focused on the realities of climate change,” Peter Zaffino, AIG chairman and CEO, said in a in a statement. “The data about climate change is unambiguous and we believe that AIG can be a catalyst for positive change as it relates to sustainability advancements and renewable energy expansion.”

Other actions included in AIG’s announcement are as follows:

  • Committed to no longer invest in or provide insurance for construction of any new coal-fired power plants, thermal coal mines or oil sands
  • Committed to no longer invest in or underwrite new operation insurance risks of coal-fired power plants, thermal coal mines or oil sands for those clients that derive 30% or more of their revenues from these industries, or generate more than 30% of their energy production from coal
  • Committed to phasing out the underwriting of all existing operation insurance risks and ceasing new investments in those clients that derive 30% or more of their revenues from coal-fired power, thermal coal mines or oil sands, or generate more than 30% of their energy production from coal by Jan. 1, 2030, or sooner


Florida’s state House this week passed a measure to create a state climate resilience office.

The bill, which would require the state to develop a resilience strategy along with a list of priorities and cost estimates, would also create a central database of sites at risk from rising sea levels, the Hill reported on Thursday.

A similar bill is pending in Florida’s Senate.

The bill provides for appointment by the governor of a chief resilience officer, who will serve as a subject-matter expert for the state on issues related to flood resilience and mitigation, be responsible for promoting and coordinating flood resilience and mitigation efforts in the state, provide strategic direction for interagency and cross-disciplinary initiatives to minimize the flood vulnerability of critical assets.

It also requires the Department of Transportation to develop resilience action plan for the state highway system, requires projects to be ranked in a Statewide Flood & Sea Level Rise Resilience Plan; and requires the Florida Flood Hub for Applied Research & Innovation to provide tidal and storm surge flooding data to certain entities.

Past columns:

Topics Florida USA Flood Energy Oil Gas Wildfire Pollution Climate Change Chemicals AIG

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