The insurance industry’s contribution to a resilient low carbon economy

In 2014 PwC was again engaged as the independent reviewer of ClimateWise, a group of insurance industry members committing to follow six principles on managing climate risk. PwC’s role is to benchmark each member’s performance against each principle and synthesise findings in a summary report.

“As Lead Authors for this report, we have seen many examples of leadership by ClimateWise members, such as how to insure the technologies of tomorrow, enable customers to protect themselves and move capital towards a sustainable future through investment decisions. These findings are timely given the increasing interest of regulators and rating agencies in how the industry is managing the business impacts in relation to climate change. Going forward, insurers will need to further improve how they measure, manage and report these impacts, both on themselves and the economies they serve.”

Jon Williams, Partner, Sustainability & Climate Change, PwC UK

The report sets out innovative examples of research, risk management and investment practice that should become increasingly relevant indicators of progress and contribution towards a resilient low carbon economy.

The insurance industry's contribution to a resilient low carbon economy

Progress towards that contribution varies across members but examples are emerging of innovative action, for example:

  • Research and product innovation to insure the technologies and markets of tomorrow
  • Contributing data and insight to build knowledge in other stakeholder groups such as national and local government
  • Facilitating the development of mitigation and adaptation solutions by reducing risk and increasing capital flow
  • Informing customers of climate risk to enable them to protect themselves
  • Incentivising the move towards sustainable behaviours through the claims process
  • Moving capital towards sustainable businesses and assets through investment decisions
  • Supporting innovative investment products such as green and flood defence infrastructure bonds

Through its new approach in 2014 - with a greater focus on materiality and prioritisation, integration into core business, impact and future activity planning - the ClimateWise initiative is supporting members to further understand the role and impact of their business.