You’d think just about everyone who’s anyone attended the massive climate change summit in Paris ending this week.
The 2015 United Nations Climate Change Conference, COP 21, drew an estimated 50,000 attendees to discuss ways to reduce Mankind’s carbon footprint, as well as how to deal with rising sea levels and more frequent severe storms generated by a warming planet.
The importance of the summit has been well covered by the press, although Wired.com late last month pointed out that those thousands of dignitaries, politicians and business people traveling from all corners of the Earth will generate roughly 575 million pounds of CO2.
To be fair, that’s not really much when compared to the entire world, which produces roughly 80 quadrillion pounds of CO2 each year, according to the Wired.com article.
Among the thousands of travelers, one entire segment of the world’s business leaders appeared to be largely missing from the affair.
The U.S. insurance community had little representation at the well-attended worldwide summit, according to Cynthia McHale, director of the insurance program for Ceres, a Boston, Mass.-based nonprofit group that advocates for sustainability leadership.
McHale has just returned from the summit, where a climate change draft plan was hammered out by world leaders.
Disclosure: I desperately wanted to attend the conference and offer full coverage, and while I feel it is an important topic to cover, I must spread out my time and resources to cover a variety of other subjects that must be kept on top of for the readers of Insurance Journal – workers’ comp, liability lawsuits, insurance regulation, El Nin᷈o, wildfires.
McHale found there were no U.S. insurers in Paris to publicly endorse action on climate change, oppose it, or even to listen to what was going on.
However, The Hartford was among several large corporations like Coca-Cola Co., Intel, Microsoft Corp., eBay, Mars Inc. and Johnson & Johnson, which comprised a coalition called Business Backs Low-Carbon USA that made it known through advertisements and public messages they were seeking “a strong and fair global climate deal in Paris that provides long-term direction and periodic strengthening to keep global temperature rise below 2°C.”
There was some presence from the U.S. insurance industry as a whole. A lone representative from the Property Casualty Insurers Association of America was on hand, as was at least one U.S. insurance regulator of note, according to McHale.
Monica J. Lindeen, president of the National Association of Insurance Commissioners, and Montana Commissioner of Securities and Insurance, was at the summit. She spoke about the need for the U.S. insurance industry to understand climate risk and plan for it in their businesses.
But McHale, who attended nearly a dozen different meetings – many of them heavy laced with themes that called out for attention from the insurance industry – neither heard nor saw one insurance industry executive.
“I can’t name a U.S. insurance company that was present that I’m aware of,” she said.
Yet many discussions at the summit were of apparent concern to the insurance community: How climate change will impact insurance investments; tapping the insurance community for its expertise in risk assessment; risk management and the need to develop risk transfer products; financing for adaptation and increased resilience to rising sea levels and increasingly frequent severe storms.
In fact, McHale called out the U.S. insurance industry’s absence during a panel discussion in which she took part.
She was on a panel hosted by the New York Times, “Putting a Premium on Climate Change,” along with Jay Ralph, chairman at Allianz Asset Management and a member of the board of Allianz SE, and Philippe Derieux, deputy CEO of AXA Global P&C.
She also noted during the panel that in her experience the “U.S. insurance sector is reluctant to use the phrase ‘climate change,’ which is almost becoming silly.”
She told members of the audience about how she experienced resistance to using the phrase in talks she’s had with some U.S. insurance executives, as well as when executives have talked publicly at events and the topic has arisen.
“I had a lot of people come up to me afterward who appreciated that I spoke clearly and directly about the situation and I didn’t pull my punches,” McHale said.
Standard and Poor’s hosted one panel called “Capital Market Solutions for Climate Finance,” in which S&P panelists talked about the growing importance of analyzing how climate change might impact the work they do when assessing credit risks.
“They are looking at how climate change impacts credit ratings, and looking at how it will impact insurance companies,” McHale said.
There was no lack of major European insurance players represented.
Allianz, Axa, Aviva plc, Munich Re and Swiss Re were among the European carriers making their voices heard at the summit, she said.
The White House on the heels of COP 21 issued a statement Wednesday outlining some heady goals for the U.S., many of which are related to insurance, including a pledge from Secretary of State John Kerry thatthe United States will double its grant-based, public climate finance for adaptation by 2020.
As of 2014, the U.S. government has invested more than $400 million per year of grant-based resources for climate adaptation in developing countries, according to the White House statement.
The commitment on Wednesday to double that figure by 2020 is part of an existing commitment by developed countries to jointly mobilize $100 billion per year by 2020.
Steps outlined in the White House statement include a recap of pledges made by Obama at the summit beyond his stated intention to reduce greenhouse gases and increase usage of alternative energies:
- Supporting the Least Developed Countries Fund: At COP 21 President Obama joined 10 other countries in announcing contributions totaling $248 million to the Least Developed Countries Fund, which plays a key role in addressing adaptation needs of least developed countries.
- Providing Risk Insurance to Hundreds of Millions of People in Vulnerable Countries: President Obama at the summit announced a contribution of $30 million to support insurance initiatives under the Pacific Catastrophic Risk Assessment and Financing Initiative, expand the Caribbean Catastrophic Risk Insurance Facility to cover Central American countries, and support the African Risk Capacity program.
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