United Nations Secretary Ban Ki-moon has called on the insurance industry to be the leader in climate change, citing it as a key player in anticipating and managing environmental issues. He is urging insurance leaders to work alongside the UN to manage and reduce related risks.
Leading the Green Initiative
According to Mr. Ban, the world needs strong leadership from the insurance industry specifically; he sees insurers as imperative in leading the cause for green initiatives.
Of course, insurers already have a history of playing a key part with climate change. They played an instrumental role at Climate Summit 2014 and also helped build up momentum for the Paris Agreement in 2015.
This call to action from the UN could see the industry as a whole play an even larger part with further green initiatives. It’s not enough just to respond when environmental disasters strike, Mr. Ban wants more to be done to prevent them.
Why the Insurance Industry
So why is the secretary of the United Nations keen for the insurance industry to step into this role? Climate change has a profound affect on their core business. As we experience it around the world, unprecedented numbers of insurance claims will begin to add up. Whether from forest fires, floods or even environment-related health issues, we cannot begin to imagine the claims that may arise in the future.
Today’s decisions will result in tomorrow’s unexpected risks; insurance professionals must learn to better anticipate and act on climate hazards, in line with the recent “Anticipate, Absorb, Reshape” initiative.
Investing in the Future
In addition to climate change affecting the very nature of the insurance industry, the industry itself has a unique opportunity to promote environmental initiatives. After all, insurance companies have some of the largest investment portfolios in the world.
If insurers invest them wisely into green businesses, it could help reduce carbon emissions and protect against further financial disruption. Mr. Ban would like insurers to double clean energy initiatives, specifically. The industry could also make crucial investments that would reduce its own carbon footprint.
Partnership for the Planet
The UN and the insurance industry could work together to protect the most vulnerable countries from climate change, giving those most likely to suffer easy access to risk transfer mechanisms. This integral partnership will help build resilience to climate change.
What do you think of the insurance industry taking a leadership role when it comes to climate change initiatives? What do you think the impact could be?