The rationalisation and consolidation of existing frameworks, however, is a positive step
The rise of Environmental, Social and Governance (ESG) initiatives, different disclosure regimes and standards has left the insurance industry in a confused “alphabet soup” when addressing the journey towards net zero, said KPMG partner Huw Evans.
To clear climate confusion, Evans said that “measurable and clear systems and standards that work globally and not just nationally” would be required.
Swiss Re country president and chief executive of UK and Ireland Jason Richards echoed Evan’s sentiments and said global standards were “definitely needed”.
He noted, however, that the industry needs to keep watch for regional and local standards being implemented as these could “complicate the picture”.
Evans and Richards were speaking as part of a panel entitled the Insurance industry’s role in delivering net zero and building sustainable business models at Insurance Times’ BrokerFest this morning (16 June 2022). They were joined by Allianz chief underwriting officer Catherine Dixon and ABI manager of climate change and open data policy Ben Howarth.
For the frameworks and initiatives that do exist, Evans said that the “most important” movement that was “beginning to happen is a process of rationalisation and consolidation”. This process is helping clarify regulations and standards for firms looking to reduce their carbon footprints, he added.
He noted that the Glasgow Financial Alliance for Net Zero was a good source of these clarified standards that “begins to provide an umbrella framework for all the UN led initiatives that many insurers in the UK have signed up to”.
Moving forward, Howarth said that the “biggest challenge” would occur when the insurance industry begins to see “red lines” as sectors are required to change their approaches to address “serious decarbonisation” in the next few years.