Submitted by Administrator on Mon, 08/02/2021 - 15:21
17 February 2021 – The ClimateWise Principles Review indicates significant improvement in climate-related disclosure of insurers and highlights sector’s vital role in shaping resilience to climate change.
The ClimateWise Principles Independent Review 2020 shows member insurance industry firms have made significant progress in disclosing their preparedness and response to climate change.
This year’s report for the group convened by the University of Cambridge Institute for Sustainability Leadership (CISL) is the second year of reporting in full alignment with the Recommendations of the Taskforce on Climate-related Financial Disclosures. It features a foreword from CISL’s Patron, HRH The Prince of Wales, who has long understood the importance of the insurance sector in the fight against climate change.
Going beyond this increase in reporting rigour, the Review records a significant increase in average score - from 55 per cent in 2019 to 65 per cent this year - for the ClimateWise group of companies. This improvement in membership score is particularly noteworthy as it has occurred simultaneously with a 25 per cent increase in the membership base, with ClimateWise welcoming seven new members in 2020 with the majority reporting against the Principles for the first time this year.
Dominic Christian, Chair of ClimateWise and Global Chairman, Reinsurance Solutions at Aon said:
“Mandatory TCFD disclosure is coming and our members are building on their decade of experience of voluntary disclosures under ClimateWise. I am delighted to see our average score increase by ten per cent this year, reflecting both the goals of our growing membership and wider changes in the disclosure landscape. Yet we know the path is long and progress must rapidly be made.”
Members of ClimateWise have been reporting against the ClimateWise Principles for 14 years and now set an industry-standard framework for meeting the expectations of the TCFD. This has been whilst also leading ambitions on wider public policy engagement, action on climate change and building societal resilience across the industry value chain. The benefits are already evident through the ClimateWise community’s recognition in the 2020 TCFD Status Report.
Bronwyn Claire, Senior Programme Manager for ClimateWise said:
“We’ve seen significant progress being made by members in the incorporation of climate change considerations into investment and underwriting strategies demonstrating growing strategic commitment to corporate and societal resilience to climate change.”
In this pivotal year for climate negotiations, including the COP26 summit hosted by the UK, the Review highlights the active role ClimateWise members are playing in shaping international climate policy and regulation. Extensive examples and in-depth case studies in the report of specific examples show the actions taken by members across the group’s focus will be on expanded scenario analysis that can support understanding and transparency around strategic resilience to climate change.
Anna Sweeney, Chair of the Sustainable Insurance Forum and Executive Director, Insurance, Bank of England said:
"ClimateWise is an important initiative, assisting the insurance industry in its important role to build societal resilience. Insurers have unique insights into the risks that the world is facing and the ClimateWise Principles provide guidance to share this knowledge more broadly; so informing public policy and supporting the identification, understanding and management of climate risk. Through decisive action, insurance companies can facilitate the transition a low-carbon economy that is resilient to a changing climate, while reducing the climate risk protection gap.”
The ClimateWise Principles have provided a framework for the insurance industry to disclose climate-related risk and opportunity since 2007. All ClimateWise members report annually against this framework. Reports are independently reviewed, scored and anonymised in a combined report to form the ClimateWise Principles Independent Review.
Huw Evans, Director General, Association of British Insurers (ABI) said:
“Through our dual role as institutional investors and risk managers, the Insurance and Long-term Savings industry is uniquely placed to shape society’s response to climate change, which is why the ABI remains proud of our longstanding membership of ClimateWise.
“A 10% year-on-year increase in the sector’s performance against the ClimateWise principles will make a significant impact across the economy, especially as these principles align to the TCFD requirements. However, it is also clear from these findings that further progress is needed – and this will require a sustained effort across the sector. The ABI is committed to continuing to work with ClimateWise to drive collective action to both reduce the level of carbon emissions and make society more resilient to the threat of a changing climate.”
The annual assessment of the integration of the ClimateWise Principles across members’ business activities is based on members reporting progress, independently reviewed by Deloitte. It highlights the overall progress being made by the ClimateWise community and provides members with individual feedback, scores and rankings that allow them to benchmark progress against their peers and inform development of members’ responses.
Neal Baumann, Global Insurance Leader at Deloitte said:
“The climate agenda is of paramount importance for the insurance sector across the globe so it’s both rewarding and encouraging to see an increase in passion, commitment and intensity across the industry. It’s critical that the industry continues with this commitment and takes action to make climate change a business priority.”
