Over 100 representatives from the financial services sector met at Lloyd’s on 24 November to listen to what the insurance industry has been doing to combat climate change.
In its first year, the ClimateWise principles have led to the insurers increasing their influence in the climate change debate, and raising awareness among customers of the issue.
The first annual independent review of the initiative shows good overall progress, with more work needed in certain areas.
Trevor Maynard, Manger in the Emerging Risks team, said: "Lloyd's is proud to have been involved with ClimateWise since its conception in 2006. The pace of greenhouse gas emissions over the last few years has exceeded the worst fears of economists which underlines the need for the global business community to stay focussed on climate change as key risk. Lloyd's remains committed to its commitments."
The aim of the first year review, carried out by Forum for The Future, the independent sustainable development group, was to assess the compliance of the 41 members in implementing the six ClimateWise principles into their business operations.
Key findings from the review show that:
- The vast majority of members are taking the lead in risk analysis, through research into future risks posed by climate change, and are playing a key role in informing public policy making.
- Most members are finding ways of raising the awareness of customers in the issue, and encouraging environmentally friendly behaviour. Half have designed products or services to help customers reduce their carbon emissions.
- However, members need to do more to incorporate climate change into their investment strategies. Half currently do so.
The report recommends actions to speed up the pace of change necessary to tackle the problems posed by climate change. These are:
- Companies should factor into their business decisions the long-term risk to the economy caused by carbon-intensive industries.
- Companies should develop products and services in new areas related to climate change, including corporate liability and insurance for carbon markets and rain forests.
- Companies should make pension funds aware of the implications of climate change for company performance and shareholder value.
Andrew Torrance, Chairman of ClimateWise, said:
“The ClimateWise Principles are intentionally holistic, and for many members the first step in this first year has been to embed them into their business strategies. They set challenging targets that will make a real difference in how members operate. The focus in the second year is on increasing members’ delivery against all the principles, and extending the reach and influence of ClimateWise to enhance the insurance industry’s contribution to tackling climate change.”
