Responding to top government officials in oil, gas and coal producing states that threatened to sue over his state’s climate initiatives, California Insurance Commissioner Dave Jones has pretty much said: bring it on.
In June, Oklahoma Attorney General Mike Hunter sent a letter to California’s insurance commissioner threatening legal action if that state continues with its policy of requiring insurance companies to publicly disclose investments in fossil fuels. The letter was signed by AGs from 11 states and one governor.
Oklahoma Insurance Commissioner John Doak followed up with his own letter to Jones urging him to back off his Climate Risk Carbon Initiative, which calls for insurance company disclosure of investments in fossil fuel producing companies and aims to discourage them from such investments. As part of the climate initiative, Jones has asked insurers operating in his state to pledge they’ll refrain from investing from the coal industry.
Doak told Jones in his letter dated June 20, that he and several other state insurance commissioners have “grave concerns” over the California commissioner’s fossil fuel policy and called the Climate Risk Carbon Initiative an “affront to sound insurance regulation.” Doak’s letter was signed by insurance commissioners in Indiana, Kentucky, Montana and North Dakota.
However, in letters to the opposing AGs and insurance commissioners dated July 27, Jones told his “red state” detractors that he is “not deterred by your threats. We will not stop asking insurance companies to consider climate related risks and in particular we will not stop our Climate Risk Carbon Initiative.”
Jones has taken on climate change as one of his primary causes. He has said that insurers could have stranded assets on their books if investments in coal and other fossil fuels tank as green energy continues to become more affordable and regulations make fossil fuel-based investments an even worse bet. He pointed out that the G-20 Financial Stability Board, the Bank of England, global insurance regulators and others have warned of the risk that the value of fossil fuel investments may decline due to government actions and market forces.
He told the opposing officials that while “it is politically popular in your states to deny or ignore climate change, ignoring the potential financial risks to insurer investments from climate change is irresponsible and even reckless.”