The shareholders of Chubb Ltd. rejected on Thursday a proposal that would have limited the insurer’s ability to take out new fossil fuels but approved a proposal that requires the company to produce a report on greenhouse gases in connection with its insurance and investment activities.
The company’s board had recommended that shareholders reject both proposals.
Several global insurance companies, including Chubb, had previously limited issue guarantees related to the coal power industry, but environmental groups have pushed for more measures.
The proposal limiting Chubb’s insurance of new fossil fuels has been put forward by Green Century Capital Management Inc., which operates an investment fund that takes into account environmental, social and governance aspects when choosing investments.
The proposal, detailed in applications to the U.S. Securities and Exchange Commission, claimed that Chubb̵7;s insurance of policyholders affected by climate-driven disasters and its coverage of the fossil fuel industry was “fundamentally incompatible.”
While Chubb acknowledged that Chubb had previously limited coverage for new coal-fired plants and limited investment in coal, its efforts are “not sufficiently tailored”, the proposal said.
By recommending shareholders to vote against the proposal, Chubb said it recognized the threat of global warming and the need to move away from fossil fuel dependence, but said a transition period was necessary.
“There is no magic bullet that will create a carbon-free economy in the short term, and unfortunately the use of fossil fuels will remain necessary for a transitional period,” said Chubb’s board.
The proposal that requires Chubb to report on and how it intends to measure, detect and reduce greenhouse gas emissions in connection with its emission guarantees and investments was submitted by As You Sow, an environmental advocate group.
By recommending shareholders to vote against the proposal, Chubb’s board said that such a report would be a duplication of a climate-related disclosure report that it is already releasing.
“The board and management will consider what additional reporting will be appropriate in response to the shareholder proposal,” Chubb said in a statement.
The insurance sector’s coverage of fossil fuel projects has come under increased scrutiny. On Thursday, it was reported that March LLC is arranging insurance coverage for a controversial African oil pipeline that several major banks and insurance companies are distancing themselves from.