A week before the kick off of the COP21 talks in Paris, I was at the World Forum on Natural Capital, held in Edinburgh, to participate in a panel on "the ethics of climate change", moderated by the brilliant Inger Anderson, head of the IUCN.
My message was simple: At this point, it doesn't actually matter what the ethics of the situation is. The fact is, we have seriously altered the balance of our eco-system and brought ourselves to the brink of our own extinction (https://openminds.swissre.com/stories/835/ )
We're out of time and we're all in this together. Nature knows no borders and if we do reach that tipping point we're heading towards (and I, unlike some politicians and entrepreneurs, do believe what 98% of scientists say), it won't matter who was right or wrong, or who could have / should have done more or less, or paid more or less.
So let's stop discussing ethics, roll our sleeves up and find bite-sized collaborative ways to make change happen now. Scalable solutions that can be enacted today. Yes, we need the right regulations to incentivise the necessary business investments and behaviours. But most of all, we need everybody to stop talking about a consensus and act, each at their level of influence. But for people to act, they/we need to understand the urgency of the situation. Many do, like the Young Global Leaders I got to share two sessions with, including a Skype call with the oh-so-inspiring Richard Branson (see pic).
But many still don't. So how do we break through the cognitive dissonance? Well, one thing people & companies seem to listen to is when issues hit their wallets. And sadly, we're at the stage where the consequences of inaction are costing us more than mitigation and adaptation measures.
But in order to get a clear view of the costs we face, we need to price and integrate externalities (like water, land, air…) into companies' reporting and business processes. This is not a new issue. I was at COP17 in Durban with some of the same participants who are today at COP21, like my then CEO at Alstom Power, Philippe Joubert, who was also at the Natural Capital Forum. His key message has not changed: Corporations need clear rules and correct pricing to make the right choices to drive long-term sustainability.
One of the things I love about working in re/insurance is that it protects the world's assets so we can all bounce back when disaster strikes. To do that, re/insurers identify, assess and price risks, which I believe is key to finding sustainable solutions to the challenges we face. By putting a price tag on today's and tomorrow's risks, citizens, businesses and governments can make more informed choices, as well as drive the right regulations.
For instance, Swiss Re's Economics of Climate Adaptation studies are great examples of how we help governments implement cost-effective adaptation measures (http://www.swissre.com/eca/ ).
The re/insurance industry also helps drive long-term sustainability through the risks and companies we chose to underwrite (where higher risks come at a higher premium). Underwriting criteria include long-term sustainability, and are based on internationally recognized agreements such as the UN Global Compact (https://www.unglobalcompact.org/ ).
Moreover, with approximately USD 27 trillion in assets under management globally, the re/insurance industry's investment choices also actively shape the world.
So re/insurance plays a big role in driving the right investments, regulations and behaviors for a sustainable future. But the re/insurance industry can't do it alone. We need governments, corporations and individuals to play their part.
As Jayne Plunkett, Head Casualty Underwriting at Swiss Re highlighted during her presentation at the Natural Capital Forum, financial capital cannot exist without natural and human capital.
So here's hoping that the leaders meeting in Paris this week can reach an agreement to help us all work towards a more profitable, sustainable future. Because we simply cannot afford another fruitless COP.
Category: Climate/natural disasters: Climate change, Disaster risk, Resilience