In every crisis, there comes a moment when you have to stop wondering how other people are going to deal with the situation and start asking yourself what you can do about it. That’s as true for businesses as it is for citizens – and on the issue of climate, that moment is now.
The sixth Intergovernmental Panel on Climate Change (IPCC) report was published in early August against a backdrop of extreme weather events ranging – in Europe alone – from wildfires on the one hand to extreme flooding events on the other. If ever there was a sobering backdrop to a news event, this was it.
The report served as a “code red for humanity”, as UN secretary general António Guterres described it, and hammered home the message that the climate crisis is real.
Thankfully, most people now accept that the climate crisis is of a scale that is incomparable with any challenge the world has previously faced.
Extreme weather
For those of us in the insurance business, the evidence of this has been increasing hugely over the past decade. The rising incidence of extreme weather events, including fires and floods, have impacted most dramatically on the communities involved, but the insurance industry has seen first-hand the huge cost of these events. We are also dealing with the growing challenge of how to insure against supposedly once-in-a-generation events when they begin to become more frequent.
The challenge ahead will require action at all levels of society – from citizens, states and multinational agencies. But the business community has a particular opportunity to use its power and influence to drive positive change on the issue.
The climate crisis is worsening as a result of human activity and whilst increased business activity has had many positive impacts – rising living standards, improved life expectancy and greater national and international mobility, for example – it has also had consequences. So business has a role to play to mitigate the impact of that increased activity on the environment.
Business also have an opportunity to use their scale and leverage to drive action and ensure faster results and greater impact than would otherwise be possible. In our recent decision to offset the climate emissions of private car drivers over the coming year, one big decision from us replaced the need for individual decisions from more than 600,000 of our private motoring customers.
There are also financial instruments such as carbon credits which are designed to facilitate companies to make positive decisions like this which cannot be easily replicated at the level of individual consumers.
Investment criteria
And there are investment criteria which businesses can set and which, in turn, will drive improved behaviour by other businesses creating a virtuous circle.
In that context, Axa globally is chairing the Net-Zero Insurance Alliance . We are committing to transitioning our underwriting portfolios to net-zero greenhouse gas emissions by 2050 and will set science-based intermediate targets every five years, and independently and publicly report on their progress on an annual basis. This builds on the pioneering work that has already begun with the group’s investment portfolios in line with a net-zero transition pathway.
The group is also funding research into climate change including 230 research projects to help anticipate and prepare for more extreme weather events.
Carbon pledge
In Ireland, we have signed the Low Carbon Pledge to reduce the environmental impact of our business as much as possible and we have launched a new €6 million initiative to offset the carbon emissions referenced above.
The insurance industry in Ireland is dealing with a number of challenges at present and has a job of work to do to improve consumer confidence in our commitment to serving the community and key stakeholders. Helping our customers do the right thing on the climate issue is one area where we can demonstrate that we do want to be good corporate citizens and show that we are willing to use our power and resources to help move this issue forward and make a real difference.
Philip Bradley is chief executive of Axa Ireland
