Taking the first steps on a journey to sustainable business practice

The final day of the Ecocentric Journey Conference on Climate Change, hosted by Santam, UCT’s Centre for Criminology and Partners for Change in Cape Town, provided some insight into what business is doing about the enormous challenge of unsustainable practices on which most industry is built. With the insurance sector among those which face direct consequences from climate change, it was encouraging to see the level of interest and action being taken by international insurers – and Santam itself.

Indeed, leading insurers have come together in ClimateWise, the insurance sector initiative of The Prince of Wales’s Corporate Leaders Group on Climate Change, run by the University of Cambridge Programme for Sustainability Leadership (CPSL). Members of this body have indicated their acknowledgment of the issue of climate change and willingness to take steps which start with dialogue, towards change.

In his presentation, Dr. Eberhard Faust, Head of Climate Risk Research at Munich Re, said business strategies in response to the reality of a changing world begin with a defensive approach, and move towards compliance with emerging regulations and statures, to mitigation of new risks and on to innovation to bring out appropriate insurance solutions for the changed environment. “Insurance has an essential role to play in society in terms of limiting losses and providing benefit to those most vulnerable to climate change,” he said.

Providing insight into just how the insurance industry is responding, Faust pointed to the Munich Climate Insurance Initiative (MCII) which was launched in April 2005 in response to the growing realisation that insurance-related solutions can support the adaptation to climate change advocated in, among others, the Kyoto Protocol. The initiative brings together insurers, experts on climate change and adaptation, NGOs and policy researchers intent on finding solutions to the risks posed by climate change.

From a South African perspective, Santam – which is demonstrating its commitment to understanding and evolving its own business in response to what it accepts as a very real challenge – is a signatory to the Copenhagen Communiqué to reduce emissions, which resulted from the recent World Business Summit on Climate Change, confirmed Santam Chief Executive, Ian Kirk. He added that the company is measuring its own carbon footprint as it seeks to implement measures to manage it.

The company is also the only South African member of ClimateWise: Hendri Nigrini, Executive Head of Risk Services at Santam said: "Climate change cannot be ignored or avoided and there are also limits to how much of climate risk can be transferred to the insurance industry. We are serious about our journey. We believe every small act is important, as it all adds up. We are therefore keen to learn from like-minded peers in the ClimateWise group…and want to work together with them to address the risks, and share the opportunities for our industry concerning climate change with our clients."

Andrew Voysey, ClimateWise Secretary, closed by pointing out that the scale of the problem and hence the scale of the solutions is global. “The complexity is remarkable. We have to ask, what do we do next? It is worth remembering that this is a journey which has to start with small steps. This is what we are seeking to establish and support; what insurers are doing through ClimateWise is working towards a huge collaborative scale to accelerate learning and achieve results as we tackle a move towards business in a sustainable world.”