Risky business

Insurers act on climate change

Insurers are responding to the threat of climate change by offering a whole host of incentives for their customers to go green, according to a new report. These include everything from green building credits (to reward eco-construction and refurbishment) to ‘pay-as-you-drive’ car insurance (encouraging motorists to cut down on unnecessary miles).

The report has been put together by Ceres, a not-for-profit network of US investors and environmental groups aiming for ‘sustainable prosperity’. It applauds a number of insurers for cutting carbon in their own operations. And it also praises those who’ve helped wind power generators insure against the risk of low returns due to unusually calm weather. Reliability is an oft-cited qualm for wind power, so with insurers willing to take the sting out of the ebbs and flows, this can only encourage further investment. Paul Pritchard, corporate responsibility manager at Royal & SunAlliance, said the UK was ahead of the game in terms of its green thinking, and he believes this is “reflected in its insurance activities – renewables is a huge growth area”.

Further evidence comes in the form of UK insurers’ support for the ‘ClimateWise Principles’ initiative. Thirty-eight have already signed up to the scheme, launched with much fanfare by HRH the Prince of Wales last September. In doing so, they’re making board-level commitments to incorporate climate change into every facet of their business strategies and planning.

There’s no room for complacency in the sector, though. The Ceres report concluded that, overall, most insurers are “behind the curve in forward-thinking products and services in response to climate change”. – David Howells

7 January 2008

David Howells