ClimateWise, a global collaboration of leading insurers focused on reducing the risks of climate change, today called on developed countries to agree to a 40% cut in emissions by 2020 at the UN climate change negotiations in Copenhagen in December. ClimateWise also called on major developing countries to agree to substantial reductions relative to business as usual.
The insurers argue that these steps are crucial to limit the risk of exceeding a 2°C temperature rise, noting that the climate crisis poses a systemic risk to the global economy.
ClimateWise also called for the forthcoming Copenhagen negotiations to reach agreement on the size and structure of the financing package to help the developing world tackle climate change, as well as on all countries to implement plans to systematically reduce the climate risks they face.
Andrew Torrance, Chairman of ClimateWise and CEO of Allianz Insurance, launched the statement at a UN summit of leading finance and sustainability experts in Cape Town, alongside ClimateWise members Swiss Re, the global re-insurer, and Santam, the leading Southern African short-term insurer.
Vanessa Otto-Mentz, head of the Strategy Unit at Santam says: “The insurance industry is large and influential. We touch individuals, small and large businesses and we are essential to socio-economic development. As such we have an important role to play to shape the future. This is where ClimateWise comes in and why we at Santam aresupporting this statement.”
The ClimateWise group believes a low climate risk world depends on an ambitious, robust and equitable global deal that responds credibly to the scale and urgency of the crisis facing humanity today. With their extensive risk management expertise and ability to help customers pool the risks they face, insurers are very well placed to support efforts to manage the risks of climate change.
Otto-Mentz continues “Systemic risk is increasing in our world and requires a collaborative response. This collaborationneeds sensible policymaking as foundationas free market forces alone will not be able to address the systemic risks we all face. We need to act now to ensure the long term sustainability of industry and also socio-economic growth - at a lower ecological impact of course. Climate change and its related risks are no longer soft issues but hard economic ones.”
Speaking in Cape Town, Andrew Torrance said, “Climate change must be tackled now if insurers are to continue to play their fullest role in managing climate risk. If governments fail to act today, substantial markets may become uninsurable tomorrow. A new international deal is ultimately in all of our interests and the costs of transition to a low climate risk economy are manageable. Delay is not an option.”
Explaining the importance of developed countries agreeing to cut their emissions by 40% by 2020 (on a 1990 baseline) and an 85% global target by 2050 (on a 2000 baseline), Andrew Torrance added, “In July of this year, the G8 countries agreed that we must limit global average temperature rise to 2°C above pre-industrial levels to avoid unacceptably dangerous climate change. Intergovernmental Panel on Climate Change science tells us the only way to minimise the risk of exceeding a 2°C rise is for developed countries to cut emissions by 40% by 2020 and for global emissions to be cut by 85% by 2050.”
HRH The Prince of Wales, who launched the ClimateWise initiative in 2007, has long been of the view that the insurance sector has a vital role to play in tackling climate change. His Royal Highness explained this view, saying of the industry, “The importance of your role as society’s trusted managers of risk cannot be understated”.
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