Many economic activities underwritten by insurers fuel climate change and nature loss, says WWF

Many economic activities underwritten by insurers fuel climate change and nature loss, says WWF | Insurance Business Australia

Environmental

Many economic activities underwritten by insurers fuel climate change and nature loss, says WWF

Global report takes deep dive into impact of underwriting on climate and biodiversity goals

Environmental

By
Terry Gangcuangco

WWF, supported by Deloitte, has published a new global report examining the impact of underwriting on climate and biodiversity goals.

Called “Underwriting our planet: how insurers can help address the crises in climate and biodiversity,” the 77-page report found that many economic activities underwritten by insurers are in fact fuelling climate change and biodiversity loss, instead of underwriting companies helping to address the issue. Examples of these activities are deforestation and land conversion.

In a release, Deloitte Switzerland sustainability services head Marcel Meyer said: “The insurance industry has the power to play a leading role in our effort to work towards a sustainable future. With their reach to all industries, insurance companies have the ability to incentivise sustainable practices and promote responsible behaviours of its customers.

“By incorporating environmental considerations into their business practices, insurers can help protect biodiversity, mitigate climate change, and build a more resilient and sustainable future.”

In the report, WWF’s recommendations for insurance and reinsurance underwriting are grouped into three: overall, corporate strategy-level recommendations; recommendations for increasing positive impacts; and recommendations for reducing negative impacts.

One recommendation is the immediate exclusion of insurance services for “severely damaging” economic activities such as the expansion of the coal, oil, and gas industry; unconventional oil and gas extraction and deep sea-bed mining; and activities that use or produce persistent organic pollutants in violation of the rules set by the Stockholm Convention.

“This summer, we witnessed devastating heatwaves and wildfires across Southern Europe, Northern Africa, Asia, and Northern America,” WWF Switzerland chief executive Thomas Vellacott said.

“Insurance companies and their clients are particularly affected by these events as they lead to greater payouts and entire regions become uninsurable. It’s high time insurers address these risks by aligning their underwriting business with global climate and biodiversity goals to protect what is of value for our future.”

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