The global insurance industry has promised to lift its “climate-smart investments” – from $42 billion to $84 billion by end of 2015 – and “is set to transform its mainstream asset management by placing more emphasis on climate risk”.
Beyond the UN’s Framework Convention on Climate Change in Paris (November 2015) the industry will further commit to increasing the amount invested in climate-smart investments to ten times the current amount, $420 billion, by 2020.
For the first time ever, the International Cooperative and Mutual Insurance Federation (ICMIF) and the International Insurance Society spoke as one voice at the UNs Climate Summit last month, Shaun Tarbuck ISMIF chief executive said.
“The insurance industry manages a third of the world’s investment capital – approximately US$30 trillion,” he said.
“As the most climate-risk aware sector in finance, insurers can lead the asset management world, by overlaying good capital disciplines to manage our own climate risk which must be understood and managed across all of our investments, and thereby creating the resilient cities, communities and assets we all desire,” he said.
The insurance industry will also create and monitor a Climate Risk Investment Framework that will become accountable under the new UN Hyogo Framework, which will impact significantly climate and disaster risk reduction and resilience.
“These are bold statements of intent. But as insurers we believe we start with a big advantage, because we are already in the business of protecting lives and livelihoods in both developed and emerging countries,” Tarbuck said.
The mutual and cooperative insurance sector accounts for almost 30 per cent of the insurance market, and is the fastest growing part increasing its premium income by 27 per cent since 2007.
“Member-driven insurers put people and the planet, ahead of profit,” Tarbuck said.
The post Insurance industry tops the Climate Summit with $420bn pledge appeared first on Ethical Investor.