Global: Insurers are essential for industries to decarbonise
Source: Middle East Insurance Review | May 2024
As the world races to meet global climate targets, industries worldwide are under increasing pressure to adopt new technologies and processes to expedite their decarbonisation efforts. To cap global warming at 1.5 degrees C, heavy industries like steel, aluminium and aviation, responsible for over 30% of global carbon emissions, need to deploy climate technologies on a wide scale, according to the second report of a two-part series by The Geneva Association released on climate tech and insurance, titled ‘Bringing Climate Tech to Market: The powerful role of insurance’.
The research recognised the need for innovative approaches to assessing technology market readiness and financing, underscoring the important role of insurers. A Geneva Association survey of insurance C-level executives found that the early engagement of (re)insurers in climate tech projects is critical to improving project risk assessment and securing financing.
Despite significant progress in developing innovative climate tech, most projects remain in pre-commercialisation stages due to funding gaps, scaling challenges, and a scarcity of risk data. To directly address these challenges, The Geneva Association has put forward a novel Insurability Readiness Framework (IRF), which offers a structured approach to assessing risks from an insurance perspective.
The Geneva Association managing director Jad Ariss said, “The adoption of climate technologies requires a collaborative effort from industries, insurers, policymakers and others. Insurers are essential for securing financing and managing project risks. By addressing funding gaps and leveraging insurance solutions, insurers can accelerate the deployment of climate technologies and work towards achieving global climate targets.” M