· 2 min read
illuminem summarizes for you the essential news of the day. Read the full piece on The Wall Street Journal or enjoy below:
🗞️ Driving the news: While most insurers have reduced investments in fossil fuels, State Farm and Berkshire Hathaway continue to make multibillion-dollar bets on oil and gas companies, bucking the industry trend
• These investments have pushed the overall industry's exposure to fossil fuels higher despite the growing focus on climate risks
🔭 The context: Insurers play a critical role in financing fossil fuel companies through investments and providing insurance for projects like coal mines
• However, climate-related losses from disasters like wildfires are forcing some insurers to rethink their strategies, with many cutting their fossil fuel ties—except for major players like State Farm and Berkshire
🌍 Why it matters for the planet: Fossil fuels are the primary driver of climate change, and investments in this sector by insurers contradict the push for decarbonization
• These investments also expose insurers to increased financial risks as climate-related disasters become more frequent
⏭️ What's next: Pressure on the insurance industry to divest from fossil fuels is mounting, as firms like Axa have nearly eliminated their fossil fuel holdings, while others like Chubb have imposed stricter investment policies
💬 One quote: "It is irresponsible for insurers to still invest in fossil fuels," said Thomas Buberl, CEO of Axa
📈 One stat: Berkshire Hathaway's insurers spent $39.9 billion on fossil fuel securities in 2023, representing over 20% of their portfolio
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