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What role could insurers play in the muchneeded transition to a low-carbon economy? Travis Elsum investigates
Last year was a watershed in the climate change narrative – the UK parliament declared a climate emergency, schoolchildren marched en masse and devastating wildfires raged across multiple countries. The enormity of the challenge we face, and the grave consequences of any failure to arrest it, sunk in. Global annual CO2 emissions need to halve by the end of this decade and then reach net-zero by 2050 in order to limit the increase in global average temperatures to 1.5°C. Conversely, though, emissions have increased by 4% since the Paris Agreement was struck in 2015 – and are showing no sign of falling. For every year of delay the bar is raised, with deeper net negative emissions required in the future. The climate change problem is so pervasive and complex that it will not be solved by one person or breakthrough technology. Halting it will require an almost complete rewiring of the global economy – a co-ordinated effort from governments, experts and organisations across sectors. Long-term investors such as insurers, pension funds and other financial companies have a major role to play. Their actions can influence whether sustainable technologies will supplant fossil fuels.
Supporting the transition to a low-carbon economy sits squarely within the corporate social responsibility of insurers and other financial companies. It is no longer enough to solely exist to create shareholder value – companies are increasingly expected to play a more beneficent role in society. Similarly, employees are less likely to connect with the traditional goals of churning out ever more widgets. They are searching for something more – to make a difference. Last year, the Business Roundtable released a statement on the purpose of a corporation (bit.ly/2GhLhMo) – signed by
ILLUSTRATION: IKONIMAGES
Reasons for supporting the transition
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