Sunday, May 25, 2014

Insurance Leaders Pack Climate Punch

Under-insured: sandbags to try to stop flooding after extreme rainfall in the US (Credit: Jocelyn Augustino/FEMA via Wikimedia Commons) Click to enlarge.
It might have the reputation of being rather a dull - some might even say boring – business, but there’s no doubting the insurance industry’s financial muscle.

The Geneva Association - a leading international insurance thinktank, whose members have total assets of nearly US$ 15 trillion - has been meeting in Toronto, Canada.  And the focus has been very much on climate change.

The Association, issuing a climate risk statement calling for urgent action by governments and other bodies, said:  “The prospect of extreme climate change and its potentially devastating economic and social consequences are of great concern to the insurance industry.”

Those putting their names to the document – 66 chief executives of the world’s leading insurers - commit themselves to a set of guiding principles on what they describe as the substantial role the insurance industry can play in tackling risks related to climate change.

The insurers pledge to market insurance policies aimed at promoting the development of low carbon energy projects.  They also say they will work to attract investors to such schemes, and use their combined investment muscle to promote low carbon initiatives.

The commitments made by the Geneva Association members are likely to have considerable impact on the development of low carbon energy projects worldwide.  The availability of insurance is often a key ingredient in determining whether or not such schemes are implemented.

Among other pledges in the risk statement, insurers say they will implement measures backing new building codes, with the aim of promoting energy efficiency and sustainability. They will also use their influence to encourage politicians to better understand the potential costs of climate change.

Insurance Leaders Pack Climate Punch

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