Skip to main content

Climate Change and Sustainability

As organisations across every industry move forward with climate change and sustainability strategies, they will encounter new risks and opportunities to be managed.

Insuring the Transition

Explore how insurance can help your business invest in the transition, and connect with one of our global or regional specialists to learn more.

Related insights

Young woman completing paperwork at a desk

Article

05/12/2024

The climate fight is fraught with obstacles. As insurers and risk managers, here’s how we can help

Despite some contentious issues with the speed and form of progress at COP29, solving climate change remains a multistakeholder challenge – and risk managers need to have a seat at the table.

top view tree, beautiful background ,aerial view , mangrove forest, Natural grass texture

Podcast

03/12/2024

Risk in Context Podcast: Risk managers’ critical role in climate risk mitigation and adaptation

In this episode Marsh leaders discuss how risk professionals can leverage advanced tools, technologies, and dynamic strategies to help their organizations navigate today's complex climate landscape.

Travel by the research ship. Studying of climatic and weather changes in Antarctica. Snow and ices of the Antarctic islands.

Report

12/11/2024

Insurer Survey Report

With various groups looking to advance frameworks for net-zero insurance metrics, attention is now on how insurers can drive positive change with a commercial, real-world benefit, as opposed to restricting appetite and applying exclusions.

Marsh Mclennan Flood Risk Index

Flooding is the most pervasive among natural disasters, yet its costs are routinely underestimated. As climate change, economic and demographic trends, and a chronic shortfall in investment in resilience combine to drive risk higher, it is time to rethink our approach to flood risk.

Adapting to climate risks

Marsh’s Corporate Climate Adaptation Survey can help businesses prepare for the changes and challenges ahead. Explore our key findings and takeaways.

Climate and sustainability

Exploring the possibilities for our world ahead

How Marsh can help

Today, companies in every sector are rapidly adapting traditional business models to improve their sustainability and reduce their impact on the climate. These developments come alongside the escalating frequency and severity of extreme weather-related events that test organisations’ resilience.

The ability to anticipate, measure, and manage risks will be a critical advantage as the transition unfolds. At Marsh, we help businesses ensure they are resilient throughout the transition: analysing the evolving risk environment, preparing for what may happen, and insuring against new types of risk.

We can provide your organisation with an environmental, social, and governance (ESG) lens on risk management, helping to deliver a competitive edge and commercial advantage. Together, we’ll build a proactive plan to support financial stability in your own company, while helping create a world that is sustainable for generations to come.

FAQs

Each business faces vulnerabilities unique to its day-to-day operations; however, climate change has accelerated several major areas of risk in every industry, including:

  • Physical: With severe wildfires, record-breaking heat waves, and intense flooding, the potential physical damage of climate change to people, property, and supply chains presents major losses for companies everywhere. These changing natural events also create new challenges for managing risk and staying resilient especially as some coverages become harder to obtain.
  • Transition: The process of adjusting to a lower-carbon economy will lead to new risks for many, including changes in policy, technology, or investor sentiment that will need to be navigated.
  • Reputational: Organisations will need to be able to identify, prioritise, and act on clear sustainability and climate initiatives. The potential financial and reputational impact of failing to do so can be just as costly as the physical damage of an event itself.

Companies will need to create a proactive risk management strategy and program that addresses each of these risks, as most will experience the impact of all three in the coming years.

Increasingly, insurers are assessing the sustainability (ESG rating) of their insureds and their commitments to transition as they look to reduce emissions in their underwriting portfolios. For some companies this may result in restricted access to risk transfer, while for others it could lead to improved terms. A further consequence is product innovation to support insureds to build back better following a loss and in recognition of new exposures.

No matter your industry, you may need to consider the following insurance implications:

  • Directors and officers (D&O) liability: Failing to adapt to risk factors associated with climate change could lead to directors and officers being the subject of shareholder actions for breach of duty or loss of share value. Managing this vulnerability will become especially critical for carbon-intensive industries.
  • Property: Amid widespread wildfires, flooding, and other severe weather events, organisations must proactively plan for the loss or damage of physical assets.
  • Business interruption: Business interruption, especially for customers and suppliers, may be increasingly relevant as weather-related risks increase. Planning against business interruptions should extend to closures and losses related to events such as heat, drought, and flooding.

Although the assets each organisation must consider in its risk management approach to climate change vary significantly, a comprehensive insurance policy portfolio that includes the above coverages can help mitigate losses and address risk vulnerabilities as a whole.

ESG can be a key driver of growth as well as part of business resilience. Therefore, leaders across every industry sector are focused on sustainability initiatives to reduce risk and leverage opportunity. Today, ESG needs to be part of corporate strategy and be embedded in the business and operating model.

We can help you:

  • Prepare: Organisations will need to have a baseline assessment of their current operations to support planning for net zero and sustainability reporting. A seamless transition will require a comprehensive approach to risk management that addresses the resulting impact on the environment, people, and governance.
  • Insure: Once leaders have an understanding of their risk landscape, it will be necessary to work with an insurance partner who is ready to help manage emerging threats with new and innovative service offerings.
  • Analyse: Data-based decision making should drive all sustainability initiatives. As natural disasters become more severe and difficult to predict, leveraging best-in-class modelling tools and predictive analytics will be essential to understanding and planning for risk.

For today’s leaders, maintaining day-to-day operations, while making the transition to more sustainable processes, will prove critical to remaining profitable, keeping up with consumer expectations, and staying ahead of regulatory changes.

At Marsh, we can help you create a proactive risk management program to mitigate climate change risks, protect your assets, and invest for the future of your company and the planet.

Our team

Amy Barnes

Amy Barnes

  • Global

Amy Barnes heads Marsh’s climate and sustainability strategy. Prior to this she held a number of leadership roles with Marsh’s global energy, power, and renewables business. She has a respected depth and breadth of experience assisting some of the largest and most complex companies manage risks.

Ryan Bond

Ryan Bond

Head of Climate and Sustainability Insurance Innovation

  • Global

With more than 20 years’ insurance industry experience, Ryan is responsible for leading the global development of insurance solutions that support Marsh’s clients through the climate transition and help them achieve their commitments around sustainability and climate change. Prior to his current role, he was most recently Chief Executive, UK and Ireland, of Bowring Marsh, Marsh’s international placement business. Mr. Bond is a board member of the British Insurance Brokers’ Association (BIBA) and is also Chair of BIBA’s International & Wholesale Advisory Board.

For more information on how Marsh can help your Environmental, Social and Governance strategies.