New Sustainable Products and Services Showcase highlights insurance crucial in getting to net zero
The Insurance Task Force (ITF), as part of His Royal Highness The Prince of Wales’ Sustainable Markets Initiative (SMI), has today published a Sustainable Products and Services Showcase detailing the wide-ranging insurance support that is empowering customers to develop, invest in and scale their sustainability initiatives, supporting green innovation across multiple sectors and geographies.
The showcase illustrates the innovative risk management and risk transfer solutions currently available, and their role in underpinning and safeguarding the efforts of multiple industries as they drive climate-positive action to adapt and transition to a sustainable future. It includes insurance coverages across the hydrogen supply chain, solar energy, wind power, and carbon capture, together with parametric and microinsurance schemes protecting coffee farmers in Nicaragua and cyclones in Australia.
The trillions of dollars of financial support the industry is currently providing is protecting the significant investment and progress being made around the world and across industries as they rapidly decarbonise and innovate solutions to address the climate crisis. To further expand its integral role in enabling and accelerating the transition, Task Force members will soon be launching two new products that will provide an even greater breadth of protection across climate-positive activities and initiatives.
With substantial financial resources second only to investment management, the global insurance industry is at the forefront of climate and transition risk mitigation and adaptation. Its ability to both insure and invest in efforts to tackle the biggest risk of our time will help unlock and overcome barriers that could limit the pace of transition, and the Task Force has developed a set of proposals being put before governments and regulators to further enable those activities.
With COP26 fast approaching, the SMI Insurance Task Force will soon be unveiling an adaptable and scalable framework that will improve disaster response and recovery in climate-vulnerable economies, as well as detailing how it will boost systems change across its vast network of suppliers to drive more sustainable outcomes for millions of customers.
Bruce Carnegie-Brown, Chair of SMI Insurance Task Force and Lloyd’s, said: “The launch of this Sustainable Products and Services Showcase demonstrates the breadth and depth of support the global insurance industry is already providing to its customers across multiple industries around the world, as they transition to a sustainable future. From providing solutions that support the scaling up of hydrogen production and supply, through to the critical risk management solutions needed for offshore wind and carbon capture, the SMI Taskforce is committed to supporting the urgent changes needed to achieve net zero by 2050 and will continue to innovate in the products and services that we provide to critical industries to achieve this goal.”
Dan Glaser, President and CEO, Marsh McLennan, added: “Marsh McLennan is pleased to have co-led this initiative to demonstrate how our sector is supporting the transition to a low-carbon economy. Across our industry, we are helping companies manage risks associated with the transition and to accelerate it, we are developing green products that address gaps in coverage and drive greener business practices.”
Peter Zaffino, President and CEO, AIG, added: “The insurance industry has been a catalyst for progress as it relates to sustainability advancements, renewable energy expansion and responsible economic growth. Our industry is investing in global education to provide the clients and industries we serve with sensible paths toward a cleaner future. With our scale, deep knowledge and risk mitigation expertise, our shared commitment helps future-proof communities by addressing societal and environmental factors while enabling economic progress and supporting our clients as they develop transition plans to operate more sustainably.”
The showcase is available on the Sustainable Markets Initiative website.
* SMI Insurance Task Force Membership
• AIG: Peter Zaffino, President and CEO
• Allianz: Oliver Bäte, CEO
• Amwins: Scott Purviance, CEO
• Aon: Greg Case, CEO
• Ascot: Andrew Brooks, CEO
• AXA XL: Sean McGovern, CEO UK & Lloyd’s
• Axis Capital Holdings: Albert Benchimol, CEO
• Beazley: Adrian Cox, CEO
• ClimateWise: Dominic Christian, Global Chairman
• Conduit Re: Neil Eckert, Executive Chairman
• Direct Line Group: Penny James, CEO
• Hiscox: Bronek Masojada, CEO
• Howden Group: David Howden, CEO
• Legal & General: Nigel Wilson, CEO
• Lloyd’s: John Neal,CEO
• Marsh McLennan: Dan Glaser, President and CEO
• Munich Re: Joachim Wenning, CEO
• Phoenix: Andy Briggs, Group CEO
• Tokio Marine Kiln: Brad Irick, CEO
• Insurance Development Forum: Ekhosuehi Iyahen, Secretary General
1. Driving insurance product and services innovation to empower commercial customers to develop, invest in and scale their sustainability initiatives, supporting green innovation across multiple sectors and geographies. As part of this initiative, the Task Force will launch at least two new insurance products to protect priority industries, such as nuclear energy, hydrogen and offshore wind, against an evolving risk landscape, in order to enable their accelerated growth.
2. Implementing sustainable processes across the insurance supply chain to encourage and incentivise individuals to take positive actions to live more sustainably. This will include launching an industry-wide framework to drive sustainable outcomes for customers, for example through introducing “build back better” claims clauses in home insurance policies to encourage customers to rebuild damaged properties with more sustainable materials in support of a net-zero transition.
3. Establishing a public-private disaster resilience, response, and recovery framework to help protect developing nations from the evolving economic and societal impacts of climate change, including the effects of increasingly frequent and severe weather events. The framework will leverage the insurance industry’s unique ability to combine an insurance product with risk management and loss recovery services, in order to increase preparedness for and limit the impacts of these events. Once developed, this solution will be rolled out across vulnerable countries to support better disaster response and recovery, with a pilot being initiated in 2021.
4. Developing a framework for accelerating and scaling sustainable investment to help unlock the global (re)insurance industry’s more than $30tn in assets under management, increasingly directing capital towards investments that drive climate-positive outcomes in both developed and developing nations. As part of this initiative, an investment proposal will be developed through collaboration between public and private sectors, with a particular focus on renewable energy and climate transition assets to enable the transition towards a low-carbon economy.
5. Defining the industry’s ability to enable multi-sector transitions through developing an approach to measuring the carbon footprint across underwriting portfolios and establishing a framework to track the global insurance industry’s ability to support the transition towards net zero across multiple industries and geographies. Over time, this framework can be scaled to incorporate additional data and metrics as these become available.
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Sustainable Markets Initiative
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About Sustainable Markets Initiative (SMI)
His Royal Highness, The Prince of Wales, launched the Sustainable Markets Initiative (SMI) alongside a 10-point action plan at Davos in January 2020. The SMI is a network of global CEOs working together to build prosperous and sustainable economies that generate long-term value through the balanced integration of natural, social, human and financial capital.
The SMI facilitates the development of responsible transition pathways at industry and business levels to decarbonize and achieve net-zero GHG emissions in addition to creating a Nature-positive future with a focus on biodiversity regeneration. The SMI Secretariat is supported by SMI’s corporate partners through a world-class secondment programme. Read more: www.sustainable-markets.org
About HRH The Prince of Wales:
For over 50 years, HRH The Prince of Wales has built a unique credibility by using his voice to advocate for action to tackle the climate and biodiversity crises including serving as Patron to dozens of environmental initiatives and organizations. The Prince’s first speech on the issue was in February 1970 when he spoke of the problems of throwing away materials such as plastics, and how we could make conservation cost effective.
HRH was a lone but determined voice on this issue for many decades, but climate is now at the top of the international agenda. As the next Head of the Commonwealth, HRH has also been convening the 54 leaders of the Commonwealth to ensure the views of developed and developing countries alike are heard, and to focus on the green recovery, investment for sustainable transition and the opportunity for collective action across the Commonwealth, particularly across climate vulnerable and small island states.
The Terra Carta
Launched by His Royal Highness at the One Planet Summit in January 2021, the Terra Carta provides a practical roadmap for acceleration towards an ambitious and sustainable future; one that will harness the power of Nature combined with the transformative power, innovation and resources of the private sector. The Terra Carta serves as the mandate for the Sustainable Markets Initiative. Currently there are over 300 CEO-level supporter supporters, including the first C40 city of Athens, Greece.
HRH is appealing to public, private and philanthropic leaders around the world to join this endeavor as part of the ‘coalition of the willing’. Read more: www.sustainable-markets.org/terra-carta