COP21 Climate Conference a landmark success – but where do we go from here?
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Swiss Re's Group CEO and climate experts share their insights
Ministers and negotiators of 195 countries gathered in Paris for the COP21 UN Climate Conference during two weeks in early December 2015. Finally, after 20 years of repeated disappointments, a legally binding agreement to fight climate change was adopted, and by consensus. The agreement not only aims to cap global warming at 2°C over pre-industrial levels – but if possible further still, with a new target of 1.5°C. The agreement has been lauded as a landmark success. But what does it mean in practice, and where do we go from here?
Group CEO Michel Liès, an active supporter of the 2°C cap, was present at the COP21 Action Day in Paris. You can see his take on the outcome in this video.
David Bresch, Head Business Development, Global Partnerships was a member of the Swiss governmental climate delegation, participating in the negotiation process. His role was to advise governments and international organizations on how insurance can be applied in their efforts to achieve climate resilience. Together with Andreas Spiegel, Head Group Sustainability, he summarizes the outcomes of the Paris Climate Conference, below, and analyses how it will play out.
David, how would you describe the key outcomes of COP21 in Paris?
David: "Obviously I'm delighted that a formal agreement around the 2°C target has been achieved alongside a process towards reaching it. This provides more certainty for all actors, not least the private sector. The Paris agreement contains provisions to establish a "clearing house for risk transfer and facilitates the implementation of comprehensive risk management strategies. This sends a clear signal to countries to commit to meaningful emission reductions and to pre-emptively manage climate risk."
What does this mean for insurance?
David: "The Paris agreement offers opportunities for the insurance industry in general, especially in the areas of sustainable energy, public sector risk financing and natural disaster risk transfer. During COP21 several new insurance related partnerships were announced like the G7 InsuResilience Initiative and the Climate Insurance Fund."
Andreas: "We should however be aware that this poses a challenge for how we as an industry position ourselves vis-à-vis the global emission reduction paths. The international agreement pushes the obligation to act to the national level. Countries will have to translate this into regulation and standards. The goal should be to enable the private sector to play a very active role. In this spirit, Swiss Re signed the Paris Pledge for Action, which states "we pledge our support to ensuring that the level of ambition set by the agreement is met or exceeded". This supports the numerous related climate statements we have signed up to so far.
What does it mean for Swiss Re?
Andreas: Swiss Re is well positioned to play a leading role. We are already recognized as a climate leader and involved in regulatory discussions.
Down the road, where will the world be on Climate Resilience in a decade?
David: By 2020, many nations will have ratified the Paris agreement and will have started to reduce emissions and adapt to a changing climate. At this point, the role of the private sector will have been defined more clearly too.
Andreas: I expect that the insurance industry will not only be providing risk transfer solutions, but also clarifying its support to emission reduction efforts and actively managing its carbon footprint. This fosters transparency and will serve to better align the industry with international policy. This is where long-term thinking becomes even more important.
David: Swiss Re made a commitment to having advised 50 sovereigns and sub-sovereigns on climate risk resilience, and to have offered them protection of USD 10bn against this risk by 2020. The Paris agreement adds an element of urgency to this and enables us to play to our strengths."
For a more information about Swiss Re's climate activities, please go to our Climate Action Portal.