Op-Ed: Here’s how companies can strong-arm their suppliers into cutting carbon emissions
Every few weeks, we hear about another company or group of companies who are threatening to boycott fossil fuels. But one company should not be vilified like the other. It is not a bad company, nor even a very effective one. That company is American International Group (AIG), the second largest insurance company in the U.S. It does not have a large carbon footprint or environmental history on its record sheet. But if it were to walk away from its investments in coal and oil, it could have a serious impact on climate change and the health of the planet.
American International Group, the nation’s second largest insurance company by volume, will not honor its obligation to the federal government to help pay for carbon emissions reductions efforts, its employees told the U.S. Senate Energy and Natural Resources Committee.
The company, which is majority-owned by the government, has made similar commitments to divest its holdings in coal and oil and has said it will take additional actions because of the carbon price policy passed by Congress in 2008.
The company’s decision does not come as a surprise. But it is an important action that takes companies and shareholders back to a time, not long ago, when they looked to the government — in the form of the military, banks, or large corporations — for protection against the climate-changing effects of fossil fuel use. In those days, the U.S. Department of Energy was known as the Department of Defense.
The company’s divestment pledge was first made in 2008, when the company’s investment in the coal sector was $30 million, or 4 percent of its total assets. The coal investments were purchased through what was then known as the “coal program,” developed by the Bush administration in 2003 and administered by the government’s Office of Fossil Energy.
The program included more than $20 billion worth of investments in more than 2,000 coal and oil mines as well as other assets with the same characteristics. As a result, the government received more than $1