By Amy Barnes ,
Head of Climate and Sustainability Strategy
Today, the focus was on exploring how science and innovation can be utilised to deliver climate solutions. The call for national governments and international communities to support those on the ground is both resounding and clear, and innovation can accelerate this action.
A number of sessions focused on the need for a holistic approach to the significant changes that are needed. There is a clear example of this within the construction industry. Globally, we will see the built environment double between now and 2060, yet currently, buildings are responsible for approximately 40% of global emissions. Not only do we need major retrofits to reduce emissions for the existing stock, but we also need to develop innovative new ways to construct.
Adding to this, innovative changes to infrastructure, along with the new technologies used to build resilience, can be hard to insure as they rarely have claims history. This makes it difficult for the insurance sector to price the risk.
An innovative approach is also needed within the insurance sector in order to support sustainability. Many developing countries are the most heavily impacted by climate change risk; the insurance sector must evolve its means of global distribution of products in order to close the protection gap. We can look towards parametric offerings, or public-private partnerships, to address these issues.
At Marsh, we are also reinforcing and driving sustainability: our new directors and officers liability (D&O) insurance initiative will recognize US-based clients with superior environmental, social, and governance (ESG) frameworks. This will favor organizations that are leaning towards adaption and supporting climate action initiatives.
Even when climate action targets are reached, we will still feel the impact of climate change; COP26 efforts are to pause the clock, not rewind it. As such, we will continue to see climate change effects, such as extreme weather, and their impact on ecosystems. In anticipation of this, COP26 urges countries most affected by climate change to build resilience, both for their communities and the environment.
Therefore, we need to start building resilience into our infrastructure — such as defenses and warning systems; restoring ecosystems and enhancing their protection; and instilling a culture of sustainability among communities.
Flooding is an example of a disaster that is increasing in frequency and severity. The insurance industry has models and data to help manage the risk by enabling businesses and communities to build strategies that increase their resilience.
Marsh also supports more practical measures — we utilize risk mitigation and management to help build more resilient communities.
This blog is part of the COP26 series.