Insurance and Climate Change column

Boston Mayor Pledges EV Charging Stations at 10-Minute Walk Intervals

By | November 19, 2020

The Dow Jones Sustainability Index just released their 2020 rankings, and Zurich Insurance Group took the top spot in the insurance sector.

The assessment is an annual evaluation of companies’ sustainability practices and performance, which includes more than 7,300 companies representing roughly 95% of global market capitalization.

Companies are assessed on the basis of 80 to 120 industry specific questions across 61 industries. Scores range from 1 to 100 (best).

Zurich earned an overall score of 90, more than twice the industry average, and high scores in social, environmental and governance & economic categories.

The report also offered some kind words for the industry as a whole:

“The insurance industry has demonstrated leadership in integrating sustainability considerations into its core business. Leading insurers are increasingly considering long-term sustainability trends and factors in the development of new sustainable insurance solutions, as well as in their risk assessments and claims-management processes. This includes climate change risk and cybersecurity risk.”

Zurich also recently became what it says is the first large institutional investor to prioritize the environmental and social goals of its impact investment portfolio.

Zurich announced it will invest what is needed to meet its targets of avoiding 5 million metric tons of CO2 equivalent emissions annually and improving the lives of 5 million people a year

Zurich will focus on its targets of avoiding 5 million metric tons of CO2 equivalent emissions annually and improving each year the lives of 5 million people.

Central Banks

European central banks should make sure that climate-related financial risks are given due consideration in their own risk management, Deutsche Bundesbank President Jens Weidmann writes in an opinion piece in the Financial Times this week.

Weidmann says it is “essential for us to learn more about the implications for monetary policy of climate change and efforts to address it.”

“Climate-related financial risks are another factor that central banks need to consider. In our role as prudential supervisors and guardians of financial stability, we have to ensure that banks adequately incorporate these risks into their risk management,” he writes.

He proposes that the European Central Bank and the national central banks, or the Eurosystem, should consider only purchasing securities or accepting them as collateral for monetary policy purposes if the issuers meet certain climate-related reporting obligations, and examine whether banks should use only credit ratings from agencies that include climate-related financial risks.

It isn’t the role of the Eurosystem to penalize or promote certain industries, he notes.

“Our primary objective is to maintain price stability,” he writes. “To achieve this goal in an economic crisis like the one we face today, it is imperative for monetary policy to keep interest rates low and support the whole economy. Asset purchase programmes are a component of our expansionary monetary policy. To be effective, they need to be broad-based.”

Boston Climate

Boston Mayor Marty Walsh, who has pledged to make his city carbon-neutral by 2050, on Monday unveiled a Zero-Emission Vehicle Roadmap to curb climate change, with new green infrastructure, emissions-cutting targets and efforts to get people out of personal vehicles an onto public transportation, walking and biking.

Plans to have electric vehicle charging stations in every Boston neighborhood by 2023, and within a 10-minute walk of every household by 2040, with electric cars accounting for nearly a fourth of every vehicle purchase in the city by 2025 and “the electrification and decarbonization of most of the municipal fleet over the next few decades,” were detailed this week in the local news site MassLive.com.

The website reports that more than 700 publicly accessible charging stations have been installed throughout the city.

Boston joins a growing number of local and state governments taking action to address climate change.

The New York State Department of Financial Services Superintendent launched new initiatives to address climate-related financial risks, and called on insurers to begin integrating these practices into their risk management and business strategies.

Michigan Gov. Gretchen Whitmer signed an executive order that aims to make the state’s economy carbon-neutral by 2050. Florida Gov. Ron DeSantis in July signed a slew of new laws to address climate issues, and require sea level study for construction.

Denver voters on election day passed Measure 2A, which would raise city sales tax by 0.25% starting in January with the goal of reducing the city’s climate footprint, a move the Denver Climate Action Task Force estimates will raise $36 million annually.

Scientific American

Scientific American reached out to researchers and asked “What is the most important action you want to see the Biden administration take to address climate change?”

Numerous answers from top researchers in the recent article included and promoting electric vehicles and incorporating environmental justice.

Constantine Samaras, associate professor of civil and environmental engineering at Carnegie Mellon University, tells the publication “the pace and scale of what we need to do over the next three decades to address climate change is Herculean.”

“Every sector of the economy affects climate change, and every sector is vulnerable to climate impacts,” Samaras said. “But the most important action a Biden administration can take to address climate change is kick-starting a new era of equitable transportation mobility without oil.”

Removing leaders in key positions “who are openly hostile to climate science,” is on top of the wish list of Kim Cobb, paleoclimatologist and director of the Global Change Program at the Georgia Institute of Technology.

Going carbon neutral sooner than later was mentioned by a few.

“Achieving net carbon neutrality in the U.S. by 2050 would represent a tremendous success after decades of delay and inaction at the federal level,” said Daniel Swain, climate scientist at the University of California, Los Angeles.

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