November 2017 – The ClimateWise Principles Independent Review 2017 of the six ClimateWise Principles finds a third year of improved scores for members of the insurance industry leadership group. On its 10th anniversary the report finds the industry has improved its investment activities but members should look to further integrate climate change related initiatives into their core business strategies and look to increase board-level oversight on climate change and sustainability.
About
The ClimateWise Principles guide members’ contribution to the societal transition to a zero carbon, climate-resilient economy and integrate a response to the climate risk protection gap – the growing divide between economic and insured losses – across their business activities. This year members were also encouraged to disclose against the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosure (TCFD) recommendations which significantly overlap with The ClimateWise Principles.
Part of ClimateWise membership obliges members to report annually on their individual progress. The annual, independently audited assessment provides private individual ranking allowing members to benchmark progress against their peers. An annual, public review highlights the overall progress being made by the ClimateWise community.
Findings
The 2017 review finds that ClimateWise members are, overall, continuing to lead the way in responding to climate change, and continue to make steady progress in addressing the risks and opportunities of climate change. This year saw a continued rise in the average member score, rising to 60 per cent. One member has also achieved a new high score of 91 per cent(under current marking criteria).
Celebrating its tenth year, The ClimateWise Principles highlight a rethinking of the traditional insurance model by members. This includes engaging in collaborative resilience-building initiatives right across the public and private sectors. This is especially true in cities given they are sources of both concentrated climate-related risk and offering significant commercial opportunity.
The Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) offers one way to enhance climate disclosures on the risks and opportunities of climate change. ClimateWise members have now been doing this for 10 years and there is significant overlap between the Principles and the TCFD recommendations. In 2017 ClimateWise members reported on a variety of impactful and strategic initiatives addressing climate change challenges. Others have produced climate research and communicated ways for urban areas to adapt to climate change. Some have then gone further and are incentivising risk-reduction activities by reducing certain product prices for customers taking adaptive action.
The greatest improvement in average score was in Principle 4 (Incorporate climate change into our investment strategies) with members responding to various sustainable investment initiatives from both ClimateWise and the broader market over the last two years.
Going forward members should look to further integrate climate change related initiatives into their core business strategies, increasing board-level oversight on climate change and sustainability to maintain long-term climate action.
Citing this review
Please refer to this review as University of Cambridge Institute for Sustainability Leadership (CISL). (2017). Insurable cities: The ClimateWise Principles Independent Review 2017. Cambridge, UK: Cambridge Institute for Sustainability Leadership.
