Beyond ‘business as usual’. Addressing the climate change crisis

(Bob Blob, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Mario Greco, Chief Executive Officer, Zurich Insurance Group

Every year, insurers see first-hand the devastation natural disasters inflict on people and communities around the world. From flooding in Japan, wildfires in the US, to a massive earthquake and tsunami in Indonesia, our customers looked to us for support – and this was only in 2018. Helping customers in their times of greatest need is “business as usual”, and we are proud to have this important social value.

But there is nothing “usual” about what is increasing the impact of these natural disasters. The consensus of the international scientific community – represented by the Intergovernmental Panel on Climate Change (IPCC) – finds strong evidence that climate change is occurring, that it is influenced by human action, and that it is leading to changes in extreme weather and climate events.

The IPCC gives the world only 11 years to successfully transition or risk catastrophic consequences. And Zurich’s own analysis suggests that the likelihood of missing the Paris Agreement’s target of limiting global warming to 2ºC or below is currently higher than achieving it.

If we are to address our climate crisis, all companies need to reach beyond their own “business as usual”. And Governments have to think beyond a “my term in office” mentality, separating climate change from political tensions. The World Economic Forum does important work in highlighting the issues and bringing us together on ways forward. This includes the Global Risk Report, where environmental risks have continuously dominated the risk landscape.

For our part, Zurich has accelerated its contribution towards a low-carbon economy. We recently became the first insurance company to commit to the UN Global Compact’s Business Ambition for 1.5°C Pledge – aimed at limiting average global temperature increases to 1.5°C above pre-industrial levels by 2030. Through this pledge, we are taking concrete actions – future proofing our operations, applying our investment and underwriting capabilities to climate risk, and protecting communities against extreme weather.

We are active in developing industry methodology to measure the carbon footprint of liabilities. This will enable science-based target setting for underwriting portfolios, giving a better view of where progress must be made. We will also encourage our clients and investees to begin the transition from carbon-intense fossil fuels like thermal coal, oil sands and oil shale within two years. Those that continue to rely on these materials for over 30% of their revenue or energy consumption will generally no longer receive cover or investment.

Finally, we will use only renewable energy as power by 2022, look to eliminate single-use plastics, and reduce internal paper usage by 80%. These measures come in addition to the Zurich Flood Resilience Alliance, which supports 110 mostly low-income communities in nine countries. And each year, our impact investments aim to avoid 5 million tonnes of CO2-equivalent emissions and improve the lives of 5 million people.

Zurich hopes to inspire others to action through awareness campaigns with customers, communities, peers and in social and traditional media. Our thought leadership – such as a recent climate change white paper – uses our risk management expertise and proposes sustainable solutions for businesses. Together, these concrete actions deliver value for all our stakeholders – be they customers, employees, shareholders or the communities where we live.

Our children and grandchildren are demanding we better protect them against climate change. They are marching for this and their message was delivered powerfully at the World Economic Forum’s annual meeting in Davos this year. We must listen and respond to their voices with real urgency.

It is time to reimagine how we can make a difference. It makes sense economically and strategically, and is expected by all our stakeholders. But most importantly, it is simply the right thing to do.