A group that has been pushing European insurers away from coal and other fossil fuels took a significant step toward replicating those efforts in the U.S. with the rollout of a new campaign and the first commitment from a U.S. insurer Sept. 11.

Insure Our Future is the new U.S.-focused arm of the international Unfriend Coal campaign that touts efforts to drive a significant amount of coal exclusion policies from major European insurers in the past three years. The group said in February that it planned to pivot its focus to the U.S., where it claims insurers have lagged on climate action.

The campaign was unveiled just ahead of the Global Climate Action Summit in San Francisco and is already counting Lemonade, a property and casualty underwriter, as the first U.S. insurer to commit to never invest in coal.

The 40 largest U.S. insurers hold over $450 billion in coal, oil, gas and electric utility stocks and bonds, Insure Our Future wrote in a Sept. 11 news release. The campaign is painting the U.S. insurance industry as a major contributor to climate change and is urging companies to ditch underwriting and investing in coal projects.

Early endorsers of the Insure Our Future campaign include large environmental groups such as the Sierra Club, Rainforest Action Network, Greenpeace USA, 350.org and the Sunrise Project, according to the release.

Since Unfriend Coal began its campaign focused on Europe, 17 large international insurers have divested about $30 billion from coal companies, while six have stopped or limited insuring the coal industry. Some of those insurers are Allianz Group, Axa, Zurich Insurance Group AG and Swiss Re AG.

"As a global insurer and investor, it is up to us to set an example by slowing climate change as much as possible, while there is still time," Axa wrote in 2017.

A coalition of consumer, climate and social equity nongovernmental organizations wrote a letter to 22 major U.S. insurers in July urging them to stop insuring and investing in coal and tar sands, but none have "substantively responded," Insure Our Future said. One of the companies targeted in that letter was Berkshire Hathaway Inc., which has written in past securities filings in reaction to shareholder moves to divest from coal that "Berkshire should not limit its universe of potential investments based upon complex social and moral issues."

"Insurance companies are vulnerable on this issue," said Patrick McCully, director of the climate and energy program at the Rainforest Action Network. "They do see it as a risk to their brands that there is this huge contradiction between their roles as risk managers and their frequently expressed concerns about the risks of climate change."

First step in US is relatively small

Lemonade CEO Daniel Schreiber wrote in a blog post on the company's website that while "not a single U.S. insurance company has publicly forsworn investment" in fossil fuels or coal specifically, "that changes today."

"Lemonade has over $100 million in investments, none of them in fossil fuels, and we're committed to keeping it that way," Schreiber wrote. "But we're a young company, and our funds are a drop in the ocean. Which is why we're calling on our industry — our reinsurance partners, our competitors, and our colleagues in health and life insurance companies — to join us by divesting from coal and other major polluters."

Lemonade is a fairly small company with just about $17.4 million in cash and invested assets through its underwriting subsidiary as of June 30, compared to $1.7 trillion for the entire U.S. property and casualty, or P&C, insurance sector, said Tom Mason, an insurance technology research analyst with S&P Global Market Intelligence. Lemonade also focuses exclusively on homeowners insurance and therefore does not underwrite insurance coverage for fossil fuel companies, he added.

"Lemonade gains a lot of attention within the industry, and it might be able to use that publicity to advance particular social causes," Mason said. "But it's important to remember that Lemonade's underwriting subsidiary has only invested in Treasury securities, cash and other short-term investments like certificates of deposit since its founding in 2015. This is not uncommon for P&C startups, however, since they need to be able to pay claims quickly."

Eye on expanding movement in US

Despite a host of unique issues, including tougher political resistance to climate action, those behind the campaign are hoping that pressure from customers and companies such as Lemonade could quickly inspire action from other insurers. Ross Hammond, senior campaign adviser to the Sunrise Project, said other U.S. insurers now have the opportunity to position themselves to "be a leader or be a laggard" on climate action.

"This is sort of the shot across the bow — the warning shot so to speak," Hammond said. "We're expecting U.S. insurance companies to step up to the plate and do the right thing."

Already, some municipalities and businesses are taking note that the insurance industry has not been active on the issue, according to the campaign's news release. San Francisco recently became the first municipal body in the U.S. to pass a unanimous resolution urging the city to end partnerships with any insurer that does not divest from and stop underwriting coal and tar sands.

"It's not like cities and businesses don't have a choice in who they buy insurance from," Hammond told S&P Global Market Intelligence. "It's a pretty competitive marketplace, so we're hoping from a business case as well as reputational and moral sense that we'll get a few of the bigger companies to start moving. … The dynamic in Europe was that once somebody makes a pledge, you start seeing movement in the whole sector."