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Could the UK insurance sector do more to protect the environment and tackle global climate change?

Could the UK insurance sector do more to protect the environment and tackle global climate change?

CLEAR director, Dan Innes, who is spearheading CLEAR’s initiative to reduce its carbon emissions and become carbon net zero by 2030, agreed to share his thoughts on how he sees the UK insurance sector tackling global climate change. 

Can the insurance industry do more for the environment?

Without question, the whole industry can do more for the environment, both locally and in a wider context.  Just by 'starting at home' and improving direct carbon output from each company’s own activities a difference can be made, and this will naturally gather pace as a wider group commit to reduce carbon emissions. We are seeing more insurers and brokers commit to climate action, and as this becomes the norm as opposed to the exception, we will then see significant cumulative benefits.

Should brokers be doing more to address climate change in their own businesses?

Certainly, brokers should be doing more.  When we started the process of change at CLEAR last year, we were able to identify the areas within the business where we could make immediate improvements. It’s only by starting the process that brokers can make these initial improvements and contribute both to the industry and global climate action.

Also, the work pattern changes we’ve made in response to the COVID pandemic have provided an opportunity to rethink how we can work in future, and it’s imperative that climate considerations form a cornerstone of 'building back better.' 

Do you think more insurers should take the lead and get involved in tackling climate-related issues?

Over the past year, our efforts to reduce our carbon footprint at CLEAR has led to discussions with insurers about their initiatives. Many insurers are already well advanced with plans to lower or mitigate their emissions and, importantly, like us, have committed to net-zero targets. What has been positive, and I think paves the way for real change, is the desire among some insurers to help promote and engender change within the wider market.

One of the insurers we’ve been talking to is looking at ways to support brokers, including providing advice on how to tackle carbon emissions. I think this shows real commitment to making a difference. Collaborative working is the way to bring about the level of change that we need to see.

How do you think this might change the way insurers choose to invest their money?

Climate-aware investment is already a real opportunity for insurers to align their portfolios to the 2016 Paris Agreement and improve longer term risk. Claims will increase as a result of climate change, there’s little doubt about that. So, the right investment strategy has more than one benefit. No-one wants a carbon intensive portfolio potentially full of stranded assets, and there are significant opportunities in supporting the development of low carbon technologies – both as insurer and investor.  

Insurers are keen to share their ESG credentials, and we have already seen many major players committing to responsible investment as a cornerstone of what they do.

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