An Insurance Times study shows that there’s little doubt among insurers about the need for environmental action. They just need to get on with it
It’s hard to believe, given the freezing winter conditions that have gripped the UK in the past two years, but last year was the hottest year on record worldwide. According to the Met Office, the world in 2010 was 0.94ºF (0.52ºC) warmer than the 30-year average of 57.2ºF (14ºC) – confirming the continuing threat that climate change poses to humankind.
This week is Climate Week, which runs from 21-27 March. The initiative spotlights the many positive steps already being taken in workplaces and communities across Britain to take on climate change. To mark the event, Insurance Times has launched an exclusive survey to find out what businesses in the insurance sector are doing to tackle the issue.
As the effects of climate change become more apparent, and severe weather events more frequent, it is the insurance sector that will be picking up the tab. Many in the industry believe that companies in the sector should be at the vanguard of implementing eco-friendly policies in the workplace, and setting a strong example to other sectors.
There’s little doubt that climate change is a big issue for the industry. According to the survey, more than half (53%) of respondents said they were concerned about it, and 28% very concerned. Half of the survey’s respondents said they had direct experience of the effects of global warming through handling claims for flood-damaged homes, vehicles or commercial premises.
Yet despite this, there is uncertainty over company policies. According to the survey, only 27% of respondents were aware that their company had a specific climate change policy, while 23% were unsure and 50% said there was no such policy at their company.
“There’s a high level of goodwill, but people are not sure what to do,” says Climate Week chief executive Kevin Steele. “The most powerful and useful way to help people do more is to publicise the best practice in the sector.”
He says there are strong incentives to going green. “You can get a win-win for the company by saving money, improving your reputation, potentially driving sales and boosting staff morale, while at the same time doing things that have a genuine environmental benefit.”
The survey showed that many companies are being proactive in implementing measures to reduce the impact of climate change. More than half (53%) of respondents’ companies had some form of eco-friendly measures in place – 36% because managers felt it was important for the business to play its part, 17% because it was felt such measures would help reduce costs.
Nonetheless, two-thirds of respondents said they would like to see their firm doing more, and 60% of respondents recognised that green policies would have a positive impact on costs. Only 13% felt that such measures would have a negative impact on cost savings.
When asked what factor most prevents their business from making changes to counter the effect of climate change, over one-third of respondents (38%) cited pressure from other priorities, such as the tough economic climate.
Aviva corporate responsibility manager Tom Oxley says: “There are so many things people can do that are low or no cost – real basics such as turning off appliances, heating or encouraging the landlord to do so. The second thing you can do is get in touch with an expert.”
He says organisations such as the Carbon Trust have lots of resources for businesses. Some offer grants for small businesses to apply changes to key equipment such as boilers.
Carbon Smart consultant Karen Mecz says: “A lot of people are engaged and they want their company to show the way. But people are not sure what they can do.”
She, too, recommends simple measures, such as switching to low-energy bulbs and promoting the use of public transport across the organisation. She also says it’s important to implement a policy that monitors the processes the company uses, so it can start to reduce its environmental impact.
Mecz believes companies can cut costs by as much as 10% within the first year of implementing such a policy.
A bonus to all this is that 45% of respondents recognise that implementing these measures would help in the promotion and marketing of their brand.
Oxley says: “When businesses do have an environmental programme, it is perfectly legitimate for them to shout about it, market their environmental credentials and make that a differentiator, so they become the broker of choice for environmentally conscious clients.” IT
Case study: independent insurance services
For broker Independent Insurance Services, protecting the environment forms a crucial part of its business plan.
Based in Folkestone, Kent, the broker has complied with the ISO 14001 environmental management standard since 2003. An internationally accepted framework, the standard calls for environmental responsibilities to be fully integrated into business operations and demands ongoing improvement in a firm's performance.
Proprietor Ray Johnson claims Independent Insurance is one of the first carbon-neutral insurance brokers. Along with providing free advice and environmental tips to clients, the company offers insurance policies that include cover for eco-friendly energy sources, such as solar panels and wind turbines. It also gives premium discounts to clients with green credentials.
In addition to cutting the company's 2010 gas bill by 14% and its electricity bill by 12.5%, Johnson says Independent's commitment to the environment has won it new business. "We attract like-minded clients because we act on our values," he says.