Beyond ‘Business as Usual’ – Addressing our climate change crisis
Every year, Zurich sees first-hand the devastation natural disasters inflict on people and communities around the world.
Every year, Zurich sees first-hand the devastation natural disasters inflict on people and communities around the world. From flooding in Japan, wildfires in the US, to a massive earthquake and tsunami in Indonesia, our customers looked to us for support – and this was only in 2018. For global insurers, helping customers in their times of greatest need is ‘business as usual’, and we are proud to have this important social value.
But there is nothing ‘usual’ about what is increasing the impact of these natural disasters. The consensus of the international scientific community – represented by the Intergovernmental Panel on Climate Change (IPCC) - finds strong evidence that climate change is occurring, that it is influenced by human action, and that it is leading to changes in extreme weather and climate events. The IPCC gives the world only 11 years to successfully transition or risk catastrophic consequences. And Zurich’s own analysis suggests that the likelihood of missing the Paris Agreement’s target of limiting global warming to 2ºC or below is currently higher than achieving it.
That is why Zurich has accelerated its contribution towards a low-carbon economy. We recently became the first insurance company to commit to the UN Global Compact’s Business Ambition for 1.5°C Pledge - aimed at limiting average global temperature increases to 1.5°C above pre-industrial levels by 2030.
Through our pledge, we are active in developing industry methodology to measure the carbon footprint of liabilities. This will enable science-based target setting for underwriting portfolios, giving a better view of where progress must be made. We will also encourage our clients and investees to begin the transition from carbon-intense fossil fuels like thermal coal, oil sands and oil shale within 2 years. Those that continue to rely on these materials for over 30% of their revenue or energy consumption will generally no longer receive cover or investment. Finally, we will use only renewable energy as power by 2022, look to eliminate single-use plastics and reduce internal paper usage by 80%.
These measures come in addition to the Zurich Flood Resilience Alliance, which supports 110 mostly low-income communities in 9 countries. And each year, our impact investments aim to avoid 5 million tons of CO2-equivelant emissions and improve the lives of 5 million people.
In short, Zurich is acting far beyond its ‘business as usual’. We are future proofing our operations, applying our investment and underwriting capabilities to climate risk and protecting communities against extreme weather. This delivers value for all our stakeholders - be they customers, employees, shareholders or the communities where we live.
If we are to address our climate crisis, all companies need to reach beyond their own ‘business as usual’. And Governments have to think beyond a ‘my term in office’ mentality, separating climate change from tensions. WEF does important work in highlighting the issues and bringing us together on ways forward. This includes the Global Risk Report – in partnership with Zurich - where environmental risks have continuously dominated the risk landscape. In addition, Zurich looks to inspire action through awareness campaigns with customers, communities, peers and in social and traditional media. And Zurich’s thought leadership – such as our recent climate change white paper - captures risk management expertise and proposes sustainable solutions for businesses.
Our children and grandchildren are demanding we better protect them against climate change. They are marching for this and their message was delivered powerfully at this year’s WEF meeting in Davos. We must listen and respond to their voices with real urgency.
It is time to reimagine how we can make a difference. It makes sense economically and strategically, and is expected by all our stakeholders. But most importantly, it is simply the right thing to do.
Mario Greco, Group Chief Executive Officer
