Resolved clauseRESOLVED: Shareholders request that Travelers issue a report on methane in the energy sector, including assessing whether and how it would be appropriate for the Company to engage with energy sector clients on their methane emissions.
Whereas clauseWHEREAS: As an underwriter of property and casualty insurance for the energy sector, including oil and gas producers, drilling contractors, suppliers, well operators,
and mid-stream companies involved in storage, processing and transportation, Travelers may be exposed to risk if it does not adequately address methane
emissions attributable to its clients. Methane is a powerful greenhouse gas (GHG). Over a 20-year period, methane is 80 times more potent than carbon dioxide, and the United Nations identifies methane as the primary contributor to the formation of ground-level ozone and associated health hazards.1 The energy sector is responsible for nearly 40% of anthropogenic methane emissions, with releases from oil and gas operations comprising nearly 61% of that figure.2 Recently, investors, NGOs, and legislators have scrutinized insurers’ underwriting and investment practices associated with the fossil fuel industry, seeking comprehensive reductions of insurance-associated GHG emissions.34
Helping clients reduce methane emissions presents an opportunity for insurers to facilitate real world impacts and demonstrate environmental stewardship. JPMorgan Chase writes in its 2023 brief entitled, The Methane Emissions Opportunity, "Reducing methane emissions and flaring in the Oil & Gas sector is an immediate action that can produce positive outcomes for businesses, the climate, and energy security.”5
Further, it states “... many Oil & Gas stakeholders, including investors, policymakers, insurance providers, and nongovernmental organizations, are recognizing that reducing methane emissions is a pragmatic opportunity and are beginning to take action.”6 In March 2023, Travelers’ peer, Chubb, announced that coverage of clients involved in oil and gas extraction projects would be “contingent on client adoption of evidence-based plans to reduce methane emissions.”7
By July, it had engaged 59 clients and started to assess their management of methane leaks, venting, and flaring. It subsequently developed a methane hub, providing clients guidelines and resources in pursuit of methane emissions reductions.8 Because of Chubb’s proactive approach, its clients are likely better positioned to comply with strengthened methane emissions regulations in the U.S. and Canada.
As an insurer of owners, operators, and service contractors in the oil and gas industry, Travelers may be poised to help its clients improve management of their methane emissions, thereby better aligning the Company with its commitment to a “long-term sustainable approach to protecting the environment.”9
Supporting statementSUPPORTING STATEMENT: At board and management’s discretion, we recommend that the report consider how it might support meaningful measurement and reduction of methane emissions among its clients through a range of possible measures including disseminating informational materials, training programs or media, integration with other climate transition communications, and if appropriate, integration to the underwriting process.