Contrary to their claims, California regulators have little insight into insurer emissions.
By Elyse Schupak
Key Takeaways
- The California Air Resources Board (CARB) has purported to exempt insurance companies from disclosing their greenhouse gas emissions under the California Climate Corporate Data Accountability Act (SB 253), arguing that this statutorily required reporting would be duplicative with data insurers already provide to the California Department of Insurance (CDI).
- An analysis of the 2024 Climate Risk Disclosure Surveys submitted by the largest 20 property and casualty (P&C) insurers operating in California reveals that this reporting would not be duplicative as there are significant gaps in insurer emissions reporting to CDI.
- Only 10 percent of the largest insurers in California make meaningful emissions disclosures to CDI inclusive of Scope 1, 2, and 3 emissions.
CARB’s emissions disclosure rule includes an unjustified exception for insurers.
Last month, CARB adopted a rule requiring businesses operating in the state to report their greenhouse gas emissions under the California Climate Corporate Data Accountability Act (SB 253). These disclosures will provide essential information for regulators, investors, and the public on the emissions contributions of many of the largest companies operating in California and across the country.
The rule, however, was advanced with an exemption for insurance companies—a decision by CARB not supported by statutory text or the record of legislative intent. Public Citizen, as well as the bill’s author and the former insurance commissioner of California, have argued that the board’s decision to exempt insurance companies doing business in the state from emissions reporting requirements under SB 253 is an unjustified exemption as it is inconsistent with statute, diminishes the benefits of the program, and creates a special carve out for an industry that is tightly linked to the state’s climate-related challenges.
CARB originally claimed insurers were being exempted from the rule to promote consistency with the rule implementing the Climate-Related Financial Risk Act (SB 261)—companion legislation which exempted insurers in statute. Then at the finalization hearing, CARB offered a new explanation for the exemption—avoiding duplicative effort for reporting entities—but failed to provide an opportunity for public comment on that justification before finalizing the exemption.
As part of the National Association of Insurance Commissioner’s (NAIC) Climate Risk Disclosure Survey, CDI collects climate risk information from insurers related to insurers’ assessment and management of climate-related risks. Though CDI’s existing reporting requirements encourage insurers to “disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas emissions,” these reports are not a replacement for standardized, comprehensive, and mandated emissions disclosure under the CARB rule. Even if insurance companies began voluntarily reporting their Scope 1, 2, and 3 emissions to CDI, that would neither ensure continued disclosure nor constitute a requirement as the California legislature intended in SB 253.
Insurer emissions reporting to CDI is not duplicative with the requirements of the CARB rule.
An analysis of the 2024 Climate Risk Disclosure Surveys submitted by the largest 20 property and casualty (P&C) insurers operating in California—covering over 70 percent of the P&C market in the state—reveals that there are significant gaps in insurer emissions reporting.
| Scope of emissions reporting | Number of the largest 20 insurers reporting |
| Scope 1 & 2 emissions |
15 |
| Some Scope 3 emissions |
10 |
| Scope 3 emissions inclusive of investments |
2 |
| Scope 3 emissions inclusive of underwriting |
0 |
| No emissions reporting |
5 |
Fifteen of the top 20 California insurers reported their Scope 1 & 2 emissions to CDI. Ten of these insurers reported some—in many cases negligible—Scope 3 emissions. Only two of these insurers reported Scope 3 emissions inclusive of emissions from their investment portfolios, and none reported Scope 3 emissions inclusive of their underwriting portfolios. Five of the 20 largest P&C insurers in the state did not disclose emissions in their reporting to CDI or did not submit a Climate Risk Disclosure Survey response at all.
Comprehensive Scope 3 emissions reporting is essential to understanding an insurer’s total emissions. Scope 3 emissions, including emissions from underwriting and investing in climate intensive industries, comprise over 95 percent of insurer emissions, on average. Though 75 percent of the largest California insurers disclosed their Scope 1 & 2 emissions, this disclosure represents only a tiny fraction of these firms’ overall emissions. In its 2024 survey response, Allstate—one of only two firms in the dataset to disclose meaningful Scope 3 emissions—reported that Scope 3 emissions accounted for 99 percent of the firm’s overall emissions contribution.
| Insurer | Some Scope 3 | Includes investments | Includes underwriting |
| Berkshire Hathaway |
X |
||
| Allstate |
X |
X |
|
| CSAA |
X |
||
| Travelers |
X |
X |
|
| Progressive |
X |
||
| Liberty Mutual |
X |
||
| Chubb |
X |
||
| Hartford Fire & Casualty |
X |
||
| Zurich Insurance |
X |
||
| Tokio Marine |
X |
Fifty percent of the insurers reported some Scope 3 emissions, but in most cases this reporting was only in categories that do not meaningfully reflect an insurer’s overall emissions, such as employee commuting, business travel, or waste from operations. Claims by insurers that they are reporting “some” Scope 3 emissions must be interrogated, as many are reporting nonmaterial categories while excluding the most significant sources of emissions.
In practice, CDI has very little information about the emissions contributions of insurers operating in California. None of the largest 20 insurers operating in California have made comprehensive emissions disclosures inclusive of emissions from investments and underwriting. Ninety percent of the largest P&C insurers in the state are reporting emissions in a way that either excludes on average 95 percent of their emissions contribution or are not disclosing any emissions data to CDI at all.
The lack of existing comprehensive emissions disclosure from insurers underscores the need for CARB to include the industry in emissions disclosure requirements. Subjecting insurers to the requirements of the rule would not be duplicative, but rather prevent an unwarranted exemption that lets insurers continue to avoid providing essential information about their contributions to climate change.
Summary of insurer emissions reporting
| Group Name | Written Premium ($) | Market Share | Scope
1 & 2 |
Some Scope 3 | Including investments | Including underwriting |
| State Farm | 10,327,778,070 | 9.69% |
X |
|||
| Farmers | 7,975,209,817 | 7.48% | ||||
| Berkshire Hathaway | 6,578,919,627 | 6.17% |
X |
X |
|
|
| Auto Club Enterprises | 6,129,337,396 | 5.75% | ||||
| Allstate | 5,229,765,456 | 4.91% |
X |
X |
X |
|
| CSAA | 4,902,170,928 | 4.60% |
X |
X |
||
| Travelers | 4,485,223,652 | 4.21% |
X |
X |
X |
|
| Mercury | 4,407,874,686 | 4.14% |
X |
|||
| Progressive | 3,888,486,768 | 3.65% |
X |
X |
||
| Liberty Mutual | 3,850,460,903 | 3.61% |
X |
X |
||
| Chubb | 3,296,324,604 | 3.09% |
X |
X |
||
| USAA | 3,187,930,846 | 2.99% |
X |
|||
| Hartford Fire & Casualty | 2,215,749,591 | 2.08% |
X |
X |
|
|
| Kemper | 2,163,879,663 | 2.03% | ||||
| Zurich Insurance | 2,047,963,609 | 1.92% |
X |
X |
||
| Nationwide | 1,861,483,294 | 1.75% |
X |
|||
| Tokio Marine | 1,482,598,875 | 1.39% |
X |
X |
||
| CNA Insurance | 1,433,615,343 | 1.35% | ||||
| Markel | 1,375,138,723 | 1.29% | ||||
| American Family | 1,291,226,406 | 1.21% |
X |
Premiums and market share data from the 2024 California Property and Casualty Market Share Report: https://www.insurance.ca.gov/01-consumers/120-company/04-mrktshare/2024/upload/Top25grps2024.pdf;
Emissions reporting data from insurer 2024 NAIC Climate Risk Disclosure Survey responses: https://interactive.web.insurance.ca.gov/apex_extprd/f?p=201:6:::NO:RP::.