A commentary on Cancún

Swiss Re first identified climate risk 20 years ago. Today, Swiss Re is a major participant in the climate debate and shapes the global climate agenda through research and active dialogue with all affected stakeholders. During the COP-16 negotiations in Cancún, Swiss Re participated as an official member of the Swiss governmental delegation for the second year in a row. Our head of Sustainability, David Bresch, explains how we came to be part of the Swiss delegation and what the outcome of the Cancún agreement means for Swiss Re.

Are you happy with the outcome in Cancún?

Yes, I think it’s fair to say that the climate talks in Cancún were a success – especially when considering where we were after the disappointing outcome of Copenhagen. In Cancún, the negotiating parties moved beyond their differences and reached consensus on a number of key issues: they confirmed the goal of limiting global warming to no more than 2 degrees Celsius and agreed to set up a new climate green fund to transfer money to developing countries. They also gave backing to the UN’s deforestation scheme and defined the building blocks for a framework to help countries design and implement effective adaptation strategies, explicitly mentioning risk management and insurance. But clearly, much more work needs to be done.  Even after Cancún, pledges made by countries to cut carbon emissions are not legally binding. Their promises to raise USD 100 billion in climate aid by 2020 are currently no more than political aspirations. And the decision on the future of the Kyoto protocol was deferred to the next climate summit in South Africa.

How did Swiss Re become part of the Swiss country delegation?

This was the second time that Swiss Re represented the Swiss Insurance Association at the UN climate change conference as an official member of Switzerland’s country delegation. The Swiss government invited us again because of our long-standing experience in modeling and pricing climate risks as well as our track record in designing solutions that help societies better respond to climate change. In addition, Swiss Re’s contributions to the government’s report on insurance as an adaptation option under the UNFCCC has demonstrated our familiarity with UN processes and helped us become a trusted partner. For Swiss Re, in turn, engaging actively in political discussions on climate change is strategically important because climate risks are part of our business. Without any global regulations these risks will remain highly variable, and that affects our core interests.

How were Swiss Re’s contributions received?

The feedback I received from other delegation members was overwhelmingly positive. During the negotiations, the delegation particularly valued Swiss Re’s contributions towards its proposal on adaptation. The fact base we were able to bring to the table through our work on the economics of climate adaptation (ECA), including our most recent findings from the Caribbean and the US Gulf Coast, lent additional credibility to Switzerland’s negotiating position and helped feature the importance of risk transfer in the final text of the agreement.

What does the Cancún agreement mean for Swiss Re?

Swiss Re has long been a strong advocate of stringent cuts in greenhouse gas emissions and increasing investments to help societies adapt to the impacts of climate change. The Cancún agreement not only reflects the broadest international consensus yet on both of these issues, but it also lays the groundwork for more concrete action. With our offerings on renewable energy and risk transfer for adaptation, Swiss Re is already at the forefront of providing innovative climate solutions. Many of our existing transactions involving key partnerships with the public sector can be redeployed and tailored to the specific risk exposure of different regions and industries. We are well positioned to play a major role in driving forward the low-carbon economy and shaping climate-resilient development.

What are your personal impressions of the conference?

For me personally, it was impressive to see how a comparatively small delegation can have such a big impact. A key success factor was the close collaboration between the public and private sectors, which often come to the negotiating table with very different perspectives. While the government is more concerned with policy frameworks, business is interested in profit-making investment opportunities. But the fact of the matter is that both of these go hand in hand if we want to tackle climate change in an effective and sustainable way. Within the Swiss delegation, we were able to constructively synthesize these two issues and thus develop a credible and strong position. This also underscores the strength of Switzerland as a leading centre of finance, research and innovation. But much credit for the positive outcome in Cancún is also due to the Mexican presidency which worked tirelessly to keep the process transparent and inclusive. This approach ultimately opened the door to a deal that was supported by such a wide variety of actors.

Published 22 December 2010

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