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Dec 2021

Money won't solve this

Source: Middle East Insurance Review | Oct 2021

Historians looking back to find the tipping point at which the insurance industry finally accepted the cruel realities of climate change may well point to 2021 as the year that leading players woke up to the part they must play.
There is a big difference between publishing vacuous messages from the chairman and the CEO in the annual report about ‘net zero’ and ‘carbon reduction’ and actually doing something – anything – practical to address our part in climate change. This applies to corporates and individuals alike.
From an insurance industry perspective – and particularly from a Middle Eastern insurance industry perspective - what is clear is that throwing money at the problem will never be enough – in the same way that greenwashing corporate messages will never be enough.
It was for this reason that I was delighted to read a headline from our sister publication Asia Insurance Review: ‘Insurer deepens emissions cuts and promotes green options’.
This was a simply enough story about Zurich Insurance initiating global measures to accelerate cuts in carbon emissions from its operations - while expanding its products and services to help customers transition to a net-zero emissions future.
The idea behind the plan is clear – it is all encompassing and will grow as times passes – but includes issuing new air-travel guidance, switching to cleaner vehicles and further commitments to reduce its environmental footprint.
And there was more. New initiatives include the insurance industry’s first carbon-neutral equity fund offering a new sustainable savings option for life insurance customers as well as an expansion of its commitment to underwrite renewable energy.
All of this is both top-down as well as bottom-up. Zurich Insurance group CEO Mario Greco said, “The climate crisis calls for urgent action and small steps taken by each of us – individuals, organisations and businesses – will add up to a giant leap over time.
“Our new measures aim to reduce our own carbon footprint further and, by having a direct impact on how we work, inspire employees, suppliers, customers and others to take action of their own.”
Mr Greco said, “The experience of the global pandemic has shown us a pathway to push boundaries, embed new behaviours and adapt to a new reality.
As the risks of climate change increase, helping our customers to net-zero is a priority and our latest sustainable insurance solutions reflect this commitment.”
Zurich aims to be a net-zero emissions business by 2050, in line with the Paris Agreement’s goal to limit global warming to 1.5°C.
I remember being shocked a few years ago when I discovered that the posh hotel I was staying at in the city of Zurich did not have air conditioning for purely environmental reasons. Nowadays it looks like prescience.
Clearly such a strategy could not work in the MENA region where summer temperatures preclude it – but insurers have a wide palette of tools they can use to be leaders rather than followers in the climate race – perhaps taking a leaf out of Zurich’s book by focusing on operations and investments as well as insurance products and services.
Paul McNamara
Editorial director
Middle East Insurance Review
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