COP21 climate negotiations in Paris: Why success is the only option

Nearly 150 heads of state and government leaders, and hundreds of negotiators are gathering in Paris over two weeks to agree on a global climate deal, aiming to cap global warming at 2°C over pre-industrial levels. Swiss Re actively supports the negotiation process and is committed to advise governments and international organisations on climate risk resilience.

If unmitigated, climate change will lead to severe negative economic consequences for our societies, unless we find a common, widespread stance to address it. In essence, governments and businesses must actively manage climate and other environmental risks and incorporate them in their economic and development strategies, as well as in their investment strategies.

Active climate management – not a cost, but an investment

"The goals of achieving economic growth and reducing climate risk are by no means in conflict, says David Bresch, Swiss Re's climate change expert, supporting the Swiss government delegation in Paris. "We do not have to choose between them. In fact, sustained growth cannot be achieved unless we address the risks associated with climate change."

The (re)insurance sector has the knowledge, tools and capital to help private and public actors to understand and to better manage their weather and climate risks.

Supporting the 2°C carbon emission reduction target and putting a price on carbon, Swiss Re has been active in the climate change arena for more than a decade, pioneering innovative risk management solutions and leading by example in our own operations. "Policy action is urgently needed to realize the 2°C target and it will require a process of market-based, transparent implementation – costing in the carbon externality. Now is the time to establish common rules for measuring, reporting and verifying national policies and their outcomes, to ensure the credibility and transparency of commitments," continued Bresch.

That's why Swiss Re is proud to have signed, together with 77 other CEOs of Fortune 500 companies, a call to action for COP21. With operations in over 150 countries and territories, together these CEO generated over $2.1 trillion of revenue in 2014.

Societies not well prepared for future climate impacts

The aim is to reach a global agreement in Paris." Bresch says, "Nonetheless it is important to advance on adaptation to climate change, as the frequency and severity of extreme weather events like storms, floods and droughts will continue to increase in many parts of the world for the coming decades. Our societies, cities and countries are not fully prepared for this. This means that the current insurance protection gap will grow even larger, putting societies at risk.

As outlined in a recent report by Standard & Poor's, simulations indicate that natural disasters can weaken sovereign ratings by up to several notches. Based on a sample of 39 sovereigns and 44 events, climate change impact exacerbates the rating impact on average by 25%. Preparing our infrastructure, societies and countries is therefore imperative, to ensure the way we live becomes more resilient.

Insurance - a tool to help close the climate protection gap

Insurance will continue to play an important part in strengthening disaster risk resilience as it provides a mechanism to compensate affected parties for damages incurred. Swiss Re is supporting this transition by providing tailor made insurance solutions for disaster relief, renewable energy solutions and by providing our know how to develop new solutions. This is why Swiss Re has committed to advise 50 sovereigns and sub-sovereigns on climate risk resilience and offer them USD 10bn risk capacity by 2020

Swiss Re's efforts to address climate at all levels of society continues to evolve, and we have just entered into new partnership agreements with development institutions, for example the German Development Agency, GIZ, and the German Development Bank, KfW, to advance such climate risk transfer solutions.

"The steps we need to take to improve climate resilience is an investment in our common future – and not a cost. If we do it right, and work together, both society and the economy will benefit." says Swiss Re's Group CEO Michel Liès

For more information about Swiss Re's climate engagement, please find a selection of commitments, insurance solutions, partnerships and publications outlined on our Climate Action page.

Swiss Re at UN Climate Summit

Swiss Re pledges USD 10bn in insurance protection and expertise to help nations strengthen climate resilience by 2020.

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Our climate change strategy

As a major global reinsurer, Swiss Re has had a major role in the climate change debate for over two decades.

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