The Treasury Department, two U.S. senators, and a national group of state regulators sought information last week to determine climate impacts on the insurance industry.
Welcome back to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
Enjoying the newsletter and think your colleagues would too? Sign up here!
Feds focus on insurance
The Treasury Department, two US senators, and a national group of state regulators sought information last week to determine climate impacts on the insurance industry and help identify which regions might next see a loss of coverage. This builds on previous inquiries from the Senate Budget Committee around insurance industry support for the fossil fuel industry and came the same week 25 organizations sent a letter demanding regulators properly supervise insurance companies and give historically marginalized communities the tools to manage climate risks and attain affordable coverage.
Meanwhile, House Financial Services Republicans denied the devastating impacts of climate change on insurance rates in a hearing last week, pushing legislation that would prohibit the Federal Insurance Office from collecting data from insurance companies, and another bill to scrap the office altogether.
Cash crunch
As the globe grapples with escalating climate-induced calamities, a UN report says adaptation funding is falling severely short. As COP28 approaches, the world faces an adaptation finance gap in developing countries estimated at $194 to $366 billion annually — over 50 percent higher than previous UN estimates. This shortfall is particularly alarming given the report's finding that developing countries require up to $387 billion each year, yet only $21 billion was allocated in 2021.
COP28 presents a critical juncture to address this issue, with the conference tasked to not only confront the urgent delivery of the overdue $100 billion in annual support by developed countries but also to consider a suite of financing mechanisms outlined in the report, including private sector engagement, global financial architecture reform, and the operationalization of the highly contentious Loss and Damage Fund — which the World Bank is now set to host.
Dimon in the anti-ESG rough
Everything is bigger in Texas, including the list of financial firms it's boycotting over their use of environmental, social, and governance (ESG) factors after five more were added last week. But Texas Republicans’ anti-free market fervor hasn’t gone unnoticed by JPMorgan CEO Jamie Dimon, who called the latest moves a risk to the state's business-friendly reputation. One thing that will surely be bigger in Texas: the costs taxpayers will incur as a result of this misguided crusade.
Mega mergers under the microscope
Big Oil’s ongoing wave of mega mergers is drawing scrutiny from several corners — not all of them expected.
Twenty-three Senators raised questions about the anticompetitive implications of ExxonMobil’s acquisition of Pioneer Natural Resources and Chevron’s takeover of Hess Corp. in a letter to the FTC, which has broad authority to block mergers that would lead to a lack of competition in the marketplace.
Responding to the letter, Public Citizen’s Tyson Slocum said, “allowing Big Oil to become Monster Oil” would create “vertically integrated oil and gas monsters that control every aspect of the petroleum industry.”
Investors, meanwhile, voted with their pocketbooks, selling enough Exxon and Chevron shares to push the supermajors’ market values down. “Growth by acquisition telegraphs slightly less confidence in oil’s longevity” versus spending their cash stockpiles on entirely new production, the WSJ noted.
November 7: Ways & Means Committee Hearing on Ensuring that “Woke” Doesn’t Leave Americans Broke: Protecting Seniors and Savers from ESG Activism.
November 8: Beyond ESG: Why Corporate Accountability Matters for Communities of Color hosted by Omidyar Network, the Sunrise Project, and Wallace Global Fund. In-person and virtual. Register here.
November 9: Climate Policy Initiative Global Landscape of Climate Finance 2023 Webinar. Register here.
November 21-22: Organisation for Economic Co-operation and Development (OECD) Green Growth and Sustainable Development Forum. In-person and virtual. Register here.
November 30: Deadline to submit inputs to the UN Human Rights Special Rapporteur on climate change, who is requesting information on corporate accountability in the context of human rights and climate change.
Thanks for reading! Tips, feedback, or questions? Reply to this email.
– Steve Hargreaves, Katharine Poole, Jayson O'Neill and Olivia Amitay
Climate Nexus, 322 8th Avenue, Suite 601, New York, NY 10001