The International Renewable Energy Agency says a surge in private lending for renewable energy projects this decade is a must in order to meeting global targets to limit the rise of temperatures worldwide.
That’s according to a Bloomberg Green report out on Wednesday, which reports that the agency estimates that private lenders and capital markets will have to boost funding for renewable energy projects this decade to about $3.2 trillion a year.
The article quotes Director General Francesco La Camera, who noted that markets have pushed a shift to renewables with costs for solar and wind power have falling, and demand for energy from carbon-emitting sources has dropped.
“The changes we are seeing are structural,” La Camera said told Bloomberg.
He added that “this decade will be decisive.”
La Camera noted that government financing is key in giving private lenders confidence to provide the needed investment to the energy transitions.
Prince of Wales
The Prince of Wales launched his Sustainable Markets Initiative Insurance Task Force during a visit to Lloyd’s in late June. The SMI Insurance Task Force, to be chaired by Lloyd’s, is comprised of executives from some of the world’s largest insurance and reinsurance companies.
The SMI Insurance Task Force has published its statement of intent, committing to provide “climate positive financing and risk management solutions” to encourage individuals and businesses to “accelerate their transition to a sustainable future.”
A number of key initiatives were announced. For commercial and individual customers, these actions include adapting and expanding coverage for offshore wind projects, alongside the implementation of “build back better” claims clauses in home insurance policies to encourage customers to rebuild sustainably.
The SMI Insurance Task Force will also work with governments to establish a public-private disaster resilience, response and recovery framework.
SMI Insurance Task Force Membership includes:
- AIG: Peter Zaffino, president and CEO
- Allianz: Oliver Bäte, CEO
- Amwins: Scott Purviance, CEO
- Aon: Greg Case, CEO
- AXA: Sean McGovern, CEO AXA XL
- Beazley: Adrian Cox, CEO
- Hiscox: Bronek Masojada, CEO
- Lloyd’s: John Neal, CEO
- Marsh McLennan: Dan Glaser, President and CEO
- Munich Re: Joachim Wenning, CEO
- Tokio Marine Kiln: Brad Irick, CEO
EU’s Financial Sector
The European Union is considering measures to bring the bloc’s financial sector into line with its climate plans, sources who have seen an EU strategy paper told Reuters.
The document outlines several actions, which includes combating greenwashing of investments, setting climate change targets for banks and encouraging low carbon blockchain projects, according to an article from Reuters posted this week in Insurance Journal.
The paper builds on the EU executive’s 2018 action, which set the stage for the bloc’s classification of “truly green investments, and mandatory climate-related disclosures by companies,” the article states.
The commission believes more action is needed as it is now clear that Europe should improve how the financial sector contributes to sustainability, the sources said.
“The EU’s goal to eliminate its net emissions by 2050 will require huge investments, much of it private funding,” the article states. “Its system of classification, or taxonomy, aims to make green activities more visible and attractive to investors.”
According to the article, the strategy paper seeks to “empower” retail investors and small companies through green loans and mortgages.
AIG, ESG
American International Group Inc. has released its first Environmental, Social and Governance Report.
“AIG’s commitment to transparent ESG leadership is a central part of our global corporate citizenship agenda,” said Peter Zaffino, AIG’s president & CEO, said in a statement. “Documenting our progress through this ESG Report creates a mechanism to share our perspectives and a way to measure our progress. With more than 40,000 colleagues conducting business in approximately 80 countries, being an agent of change is an important responsibility in a complex and dynamically changing world.”
The report describes how “AIG identifies, measures and manages environmental impact and risk, sets and lives by specific standards of corporate citizenship, and empowers its sustainability agenda, according to a press announcement.
The report aligns with guidelines such as the TCFD framework, Sustainability Accounting Standards Board Standards Global Reporting Initiative standard and UN Sustainable Development Goals, according to AIG.
Read the 2020 ESG Report at www.aig.com/about-us/sustainability.
Legal & General Investment Management in mid-June announced the firm will sell holdings in four companies including AIG, after deeming they’re making insufficient progress on addressing climate change risks.
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