A plea for action was made during the virtual Insurance Development forum closing remarks.
In UN Secretary-General António Guterres’ closing remarks at the Insurance Development Forum held virtually earlier this week, he asserted that the insurance industry is in a “race against time” to make the adaptations necessary for adapting to the speed of climate change.
As the climate continues to change rapidly, the risks are altering their shape, size, and frequency.
According to Guterres, carbon neutrality worldwide must be achieved within the next thirty years, global finance needs to align itself with the Paris Agreement, and adaptation breakthroughs must be implemented to provide adequate protection around the planet against the impact of climate change.
“As insurers and as investors, the insurance sector has a key role to play,” Guterres said, addressing the insurance industry before broadening his closing remarks. “Every country, city, financial institution, and company needs to adopt plans for transitioning to net-zero emissions by 2050. That means taking decisive action now.”
The insurance industry holds massive assets and will require its portfolios and investments to adapt.
“Insurance companies control over US$35 trillion of assets under management. I encourage the insurance industry to align its portfolios and investments with net zero by 2050. Your investments should not be contributing to climate pollution but should be directed towards climate solutions. Invest in renewables, low- and zero-carbon transport and climate-resilient infrastructure,” advised the UN Secretary General.
He pointed out that nearly 20 asset-owning insurers have joined the Net Zero Asset Owner Alliance which first convened in 2019. It is now considered to be the “gold standard” for target setting with credibility and transparency, as well as timelines for upholding commitments to net-zero carbon emissions from members. “I encourage more to join these collective efforts and ensure asset owners send a strong signal across the investment chain.”
Guterres urged the insurance industry to make net-zero underwriting portfolio commitments including the underwriting of all fossil fuels including coal. He pointed to the COP-26 to “signal the end of coal,” and gave his support to the G7 commitment for ending all public international coal support by the close of 2021. He called for the insurance industry to align itself with that commitment.