Bethesda, Md. – A self-described socially responsible mutual fund has withdrawn formal objections to the way two major insurance companies have handled climate change.
Calvert Group Ltd., a UNIFY Co. that's based in Bethesda, Md., and bills itself as “one of the nation's largest families of socially responsible mutual funds,” has removed the objections to activity at Hartford Financial Services Group Inc., Hartford, Conn., and Prudential Financial Inc., Newark, N.J.
Calvert's complaints took the form of “shareholder resolutions” that mutual fund files on company proxy statements when it objects to a firm’s behavior. Climate change shareholder resolutions against the two insurers have been withdrawn after negotiations with each insurer.
In the talks, both carriers agreed to improve public reporting and disclosure of risks from climate change and strategies for mitigating those risks, a Calvert report said.
More specifically, both agreed to respond to a climate risk disclosure questionnaire sent to companies each year by the Carbon Disclosure Project (CDP) and to disclose their assessment of the business impact of climate change.
"As a responsible corporate citizen and as a major underwriter of risk, it's appropriate for The Hartford to address the issue of climate change rigorously and comprehensively," says Neal S. Wolin, executive vice president and general counsel of The Hartford.
"We appreciate Calvert's commitment to the issue and look forward to participating in the Carbon Disclosure Project and to articulating The Hartford's views on the challenges and opportunities related to climate change," Wolin said.
"Prudential Financial recognizes the importance of addressing the business impact of climate change," said Kathleen Gibson, vice president and corporate governance officer at Prudential.
Prudential is not in property and casualty lines of insurance and does not produce elevated greenhouse gas emissions, Gibson said. However, she added, the company will devote part of a Web site to policies, programs and performance on the environment.
Calvert worked on the shareholder resolutions with Ceres, a coalition of investors, environmental groups and other public interest organizations that helps companies address environmental sustainability.
Climate change has the potential to affect virtually every segment of the insurance business, including coverage of damage to property, crops, business interruptions, life and health, Calvert said. The industry could also be affected through the large investment portfolios managed by insurance companies.
"Insurance is the world's largest industry with core competencies in risk management and loss prevention, so it is crucial that insurance companies disclose their exposure to climate change impact and also explore the significant business opportunities becoming available" said Baljit Wadhwa, a social research analyst at Calvert.
Calvert believes early action to identify risks and opportunities of climate change can pay off, Wadhwa said. Companies are integrating climate change strategy into overall business strategies and management processes, she said.
“Climate change will have far-reaching impacts on insurance companies, including higher claims and impacts on the stocks and bonds in their investment portfolios," said Mindy S. Lubber, Ceres president. "That's why Calvert and other investors are pressing insurers to boost their attention to this issue."
The Hartford and Prudential Financial's commitment to climate risk disclosure is part of a growing movement among American companies to recognize and disclose the risks and opportunities of climate change, Calvert and Ceres said.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access