Sustainable insurance in a time of planetary crisis

Let me start by congratulating you on the ten years of the Ideas of Sustainable Insurance coverage Initiative, or PSI. This, the most important collaboration between the United Nations and the insurance coverage business, is essential.

The insurance coverage business acts as an early warning system for society and a danger supervisor by understanding, minimizing, pricing and bearing dangers. The insurance coverage business and the broader monetary sector have the power and accountability to drive progress in direction of a zero-economy and a sustainable future.

Over the previous 10 years, we have now seen actual progress within the business. By PSI, we now have the most effective frameworks and pointers designed to embed sustainability on the coronary heart of the insurance coverage enterprise and obtain real-world impression. Recognizing the important thing position of insurance coverage regulators and supervisors, PSI additionally helped create the Sustainable Insurance coverage Discussion board in 2016. There isn’t a excuse for any insurance coverage firm that doesn’t have a sustainability technique for its core enterprise.

Not too long ago, an preliminary group of main insurers have embedded net-zero ambitions both of their core insurance coverage enterprise or of their investments — or each. Some main insurers have made guarantees and commitments that, if stored, might make an actual distinction. Right now, PSI has greater than 220 organizations, together with insurance coverage firms that account for a 3rd of the worldwide premium and $15 trillion in belongings underneath administration. We now have a world group of practitioners who can lead systemic change.

For all this, and a lot extra, thanks.

However now I’ll inform you what I mentioned to my group and Member States on the UNEP @ 50 celebration in March. I’ll inform you what I informed world leaders at Stockholm +50 in June. I will inform you what I might say to anybody who’s a milestone in environmental work: You have not carried out sufficient. None of us have it.

This isn’t my opinion. This can be a assertion of the reality. A press release of reality confirmed by what science tells us concerning the acceleration of the triple planetary disaster of local weather change, lack of nature and biodiversity, air pollution and waste.

The Intergovernmental Panel on Local weather Change tells us that world warming is inflicting severe disruption to the pure world, human well-being and financial prosperity. Deaths and damages from floods, droughts and storms are rising.

All this comes at 1.1°C of world warming. And there’s a 50/50 likelihood that we’ll attain 1.5°C, at the very least quickly, within the subsequent 5 years. The United Nations Workplace for Catastrophe Threat Discount just lately predicted that there shall be one large-scale catastrophe day-after-day by 2030. It’s clear that the dangers posed by world warming are escalating. Nevertheless, efforts to scale back greenhouse fuel emissions stay elusive.

Is that this sustainable?

The Intergovernmental Platform on Biodiversity and Ecosystem Companies tells us that nature is in fast decline, eroding the foundations of human well being and prosperity. As much as 40 % of the land is degraded. This decline impacts almost half of the world’s inhabitants and makes it harder to feed everybody. A million species are dealing with extinction. Main tropical forests had been destroyed in 2021 at a fee of ten soccer fields each minute.

Is that this sustainable?

Air pollution and waste kill tens of thousands and thousands of individuals yearly. One in six deaths is brought on by air pollution – from polluted air to poisonous chemical compounds. Regardless of the rising momentum on plastic air pollution, 11 million tons of plastic waste nonetheless fall into our oceans yearly. Antimicrobial resistance is on the rise.

Is that this sustainable?

These three crises add as much as one planetary emergency, pushed by the unsustainable manner we produce items and eat assets. A disaster that, if left unchecked, will destroy our well being, communities, companies and economies.

Is that this sustainable?

The reply isn’t any.

The anxious younger folks, the individuals who shall be your prospects for many years to return, are uninterested in our guarantees. Weak societies much less answerable for the injury carried out to our planet are uninterested in our guarantees. Truthfully, I feel we’re uninterested in our guarantees.

It is work time. It is time to finish our dependancy to fossil fuels. Carry nature again to its full glory. Make manufacturing and consumption sustainable. Reworking our meals methods. Make our cities inexperienced, livable, low-carbon and disaster-resistant. and retooling the worldwide monetary system, together with the insurance coverage business, to assist a wholesome and wholesome planet.

mates,

You can not do all this alone. However what you are able to do is implement formidable actions in danger administration, insurance coverage and funding actions to assist obtain the 2030 objective of halving greenhouse fuel emissions. 2030 goal to reverse the lack of nature. 2030 objective to realize the sustainable improvement objectives.

So, yeah, we’re right here in the present day to rejoice what you’ve got carried out – and carried out lots. However we’re additionally right here to indicate you find out how to construct in your accomplishments to get the job carried out. To that finish, I’ve come right here with six foremost requests.

First, the web dedication to zero

Insurers should develop and implement science-based internet zero methods and targets for his or her insurance coverage and funding portfolios by becoming a member of the Internet-Zero Insurance coverage Alliance (NZIA) and the Internet-Zero Asset Proprietor Alliance.

NZIA’s work with the Partnership for Carbon Monetary Accounts to supply the primary world benchmark for measuring greenhouse fuel emissions related to insurance coverage underwriting portfolios by November 2022 is an efficient start line.

NZIA’s work with the Science-Based mostly Targets Initiative to develop the NZIA Focusing on Protocol by January 2023 is one other necessary step. This protocol shall be utilized by NZIA member insurers to set interim, science-based five-year targets for his or her respective insurance coverage portfolios, beginning in July 2023.

Second, a dedication to optimistic transmission in direction of nature and air pollution prevention

Insurers ought to construct on the work of setting the PSI agenda to guard pure World Heritage websites, deal with plastic air pollution, and fight unlawful, unreported and unregulated fishing.

Insurance coverage firms should adhere to methods and aims based mostly on the optimistic nature within the discipline of insurance coverage and investments. PSI ought to create a Nature Constructive Insurance coverage Alliance — identical to the Internet-Zero Insurance coverage Alliance it created in 2021 — significantly given the anticipated adoption of the post-2020 world biodiversity framework later this yr.

Insurers should additionally assist the objectives of the legally binding worldwide settlement to finish plastic air pollution, which shall be in place by 2024.

Third, dedication to resilience and adaptation to local weather change

Defending essentially the most weak and leaving nobody behind is indispensable within the truthful transition to internet zero. Addressing loss and injury and constructing resilience shouldn’t be the forgotten part of local weather motion. Lowering catastrophe danger and shutting the insurance coverage safety hole is crucial.

Insurers should decide to supporting the Sustainable Insurance coverage Facility for the Group of Twenty Finance Ministers at Threat, which is hosted by PSI. This facility goals to offer insurance coverage safety to micro, small and medium enterprises in essentially the most climate-vulnerable international locations in Africa, the Center East, Asia and the Pacific, and Latin America and the Caribbean.

Fourth, life and medical insurance firms should decide to sustainability.

Well being is our best wealth. Life and medical insurance firms should embody sustainability of their core insurance coverage enterprise, not simply of their investments, particularly in a post-COVID world more and more affected by local weather change, lack of nature, air pollution and social inequality.

Insurers ought to undertake the suggestions within the first-ever sustainability information for the worldwide life and medical insurance business, which PSI will launch this yr.The tenth Anniversary occasion.

Fifth, a dedication to accountability, transparency and sustainable experience.

The complete worth chain of the insurance coverage business for insurers, reinsurers, brokers and brokers—together with insurance coverage associations and insurance coverage regulators—should make sustainability an integral a part of their choice making.

Insurers should implement the suggestions of the Process Power on Local weather-Associated Monetary Disclosures, the Process Power on Nature Monetary Disclosures, and the Worldwide Sustainability Requirements Council – all of that are necessary steps to drive systemic change.

Furthermore, all insurance coverage professionals ought to develop experience within the space of ​​sustainability, slightly than leaving it to some folks throughout the group. Sustainability must be an integral a part of an insurance coverage group’s tradition, ideas, values, methods and core operations. In brief, it ought to kind a part of each insurance coverage choice.

Sixth, create sustainable insurance coverage roadmaps

Insurance coverage markets world wide ought to observe the California Insurance coverage Commissioner to develop the world’s first sustainable insurance coverage roadmap, an initiative supported by PSI. The California Sustainable Insurance coverage Roadmap shall be offered at this PSI occasion.

The Sustainable Insurance coverage Roadmap is a complete technique and motion plan to harness the insurance coverage business’s danger administration companies, insurance coverage options and investments to speed up the transition to resilient, inclusive, optimistic and pure societies and economies. These roadmaps will function foundational frameworks for insurance coverage markets to assist the worldwide agenda of the United Nations Decade for Motion.

mates,

I do not need to belittle your achievements or view the insurance coverage business and the broader monetary sector as backward. As soon as once more, thanks for every little thing you’ve got carried out over the previous ten years. However like I mentioned, neither of us has carried out sufficient.

See, folks usually aren’t excellent at trying ahead. Most of us make short-term selections based mostly on the passage of days, weeks, or months forward. However you’re within the insurance coverage business not like most individuals. Your job is to look to the longer term, to know, scale back, value and assume the dangers. Threat administration is your core enterprise.

I’m now asking you to look into the longer term and inform your self what you see – what the longer term seems to be like for the planet, what you are promoting fashions, and everybody you care about will dwell past the following few years.

Then ask your self what you’ll do about it.

Thanks.

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