Skip to content or view mobile version

Home | Mobile | Editorial | Mission | Privacy | About | Contact | Help | Security | Support

A network of individuals, independent and alternative media activists and organisations, offering grassroots, non-corporate, non-commercial coverage of important social and political issues.

Climate Related Perils Could Bankrupt Insurers

stop esso | 10.10.2002 10:29

..


Zurich, Switzerland, October 8 2002
Environmental News Service

Climate change is causing natural disasters that the financial services industry must address, a group of the world's biggest banks, insurers and re-insurers warned Monday. They estimated the cost of financial losses from events such as this summer's devastating floods in central Europe at $150 billion over the next 10 years.

"Climate Change and the Financial Services Industry," a report supported by 295 banks and insurance and investment companies, was launched Monday at the Swiss Re Greenhouse Gas conference in Zurich.

A partnership between the United Nations Environment Programme (UNEP) and the financial institutions, known as UNEP Finance Initiatives commissioned the report. It shows that losses as a result of natural disasters appear to be doubling every decade and have reached $1 trillion in the past 15 years.

"The increasing frequency of severe climatic events, threatening the social stability or coupled with significant social costs, has the potential to stress insurers, reinsurers and banks to the point of impaired viability or even insolvency," the report concludes.

John Fitzpatrick, CFO and member of the Executive Board of Swiss Re, said, "Climate change and substantial emissions reductions - like any other strategic global business challenge - ultimately becomes a financial issue. The problems associated with environmental disasters quickly become measured in dollars and cents. Our industry needs to lead by developing financial solutions and risk mitigation techniques to assist our clients in achieving global emission reductions."

"In addition to the emitting industry needing to take a carbon constrained future into account," Fitzpatrick said, "the financial services industry, of which we are a part, also has an obligation to contribute to the solution of these problems through its own investments and business expertise."

Linked to heat-trapping emissions from the combustion of coal, oil and gas, the environmental implications of global warming (news - web sites) are serious. Melting polar ice caps and glaciers, rising sea levels, distorted weather patterns, and drought are widely forecast. Coastal cities, crops, and animal habitat could be destroyed.

But too few financial companies are taking the risks and opportunities posed by climate change seriously, a survey of mainstream financial institutions carried out for the UNEP Finance Initiatives report indicates. Most are "unaware of the climate change issue" or have adopted a "wait and see policy."

These attitudes are "due to the prolonged wrangling over the Kyoto Protocol (news - web sites)," the report states, compounded by "the lack of solid information on emissions and delays in finalizing the regulations of the new greenhouse gas markets."

The protocol, agreed under to the United Nations Framework Convention on Climate Change, limits the emission of six greenhouse gases linked to global warming. Thirty-nine industrialized nations were to have been governed by the original agreement signed in Kyoto, Japan in December 1997, but the Bush administration said in 2001 that the United States would not ratify the protocol, and Australia followed suit this summer. It still has not entered into force.

A small group of financial companies is addressing the issue, but many of them are reinsurers whose businesses are already feeling the economic impact of rising, weather related, insurance claims.
"This report is a wake up call for the global financial community. It highlights the real risks and economic perils they are facing as a result of human influenced climate change," said UNEP Executive Director Klaus Toepfer.

The property market, where loans for houses and buildings are made over relatively long periods of time, could be particularly vulnerable as a result of extreme weather events, the report warns. "Homeowners and companies with property holdings may find that their insurance cover is cancelled at short notice, leaving them highly exposed."

Government action to arrest the problem will "inevitably" mean a reduction in emissions of the main sources of greenhouse gases linked with global warming, predicts the report. This will require cutbacks and the more efficient use of fossil fuels such as coal and oil.

Asset managers who are slow to appreciate the climate change threat "may see the value of energy or power company holdings decline" as investors become aware of the liabilities linked with carbon intensive industries, the report concludes.

Recommendations in the report's "blueprint for action" include urging insurers and re-insurers to better reflect the risks from climate related perils in policies and to develop public/private partnerships in high risk areas so that cover can be maintained. Commercial banks should fully price risks from climate change into loan agreements and give incentives to schemes that encourage energy efficiency or cleaner fuels.

Greenhouse gas trading markets will need standardized accounting methods to operate, an area where financial professionals can contribute to solving the problem.

"Given the financial muscle available to them," said Toepfer, "these institutions could move markets and minds to deliver a cleaner, healthier and less vulnerable world for the benefit of the world economy, for the benefit of people everywhere."

Governments are urged to adopt a long term global plan to keep greenhouse gases at safe levels. This is "vital" because the Kyoto Protocol runs out in 2012, the report points out, whereas "carbon dioxide, methane and the other greenhouse gases can persist in the atmosphere for many tens of decades."

The report was prepared by investment research and advisory firm Innovest Strategic Value Advisors of Toronto, Canada, under the direction of the UNEP FI Climate Change Working Group - Andlug Consulting, Citigroup, Corporacion Andina de Fomento, Dresdner Bank AG, Gerling Sustainable Development Project GmbH, Munich Reinsurance Company, Prudential, SAM Sustainable Asset Management, and Swiss Re

stop esso

Upcoming Coverage
View and post events
Upcoming Events UK
24th October, London: 2015 London Anarchist Bookfair
2nd - 8th November: Wrexham, Wales, UK & Everywhere: Week of Action Against the North Wales Prison & the Prison Industrial Complex. Cymraeg: Wythnos o Weithredu yn Erbyn Carchar Gogledd Cymru

Ongoing UK
Every Tuesday 6pm-8pm, Yorkshire: Demo/vigil at NSA/NRO Menwith Hill US Spy Base More info: CAAB.

Every Tuesday, UK & worldwide: Counter Terror Tuesdays. Call the US Embassy nearest to you to protest Obama's Terror Tuesdays. More info here

Every day, London: Vigil for Julian Assange outside Ecuadorian Embassy

Parliament Sq Protest: see topic page
Ongoing Global
Rossport, Ireland: see topic page
Israel-Palestine: Israel Indymedia | Palestine Indymedia
Oaxaca: Chiapas Indymedia
Regions
All Regions
Birmingham
Cambridge
Liverpool
London
Oxford
Sheffield
South Coast
Wales
World
Other Local IMCs
Bristol/South West
Nottingham
Scotland
Social Media
You can follow @ukindymedia on indy.im and Twitter. We are working on a Twitter policy. We do not use Facebook, and advise you not to either.
Support Us
We need help paying the bills for hosting this site, please consider supporting us financially.
Other Media Projects
Schnews
Dissident Island Radio
Corporate Watch
Media Lens
VisionOnTV
Earth First! Action Update
Earth First! Action Reports
Topics
All Topics
Afghanistan
Analysis
Animal Liberation
Anti-Nuclear
Anti-militarism
Anti-racism
Bio-technology
Climate Chaos
Culture
Ecology
Education
Energy Crisis
Fracking
Free Spaces
Gender
Globalisation
Health
History
Indymedia
Iraq
Migration
Ocean Defence
Other Press
Palestine
Policing
Public sector cuts
Repression
Social Struggles
Technology
Terror War
Workers' Movements
Zapatista
Major Reports
NATO 2014
G8 2013
Workfare
2011 Census Resistance
Occupy Everywhere
August Riots
Dale Farm
J30 Strike
Flotilla to Gaza
Mayday 2010
Tar Sands
G20 London Summit
University Occupations for Gaza
Guantanamo
Indymedia Server Seizure
COP15 Climate Summit 2009
Carmel Agrexco
G8 Japan 2008
SHAC
Stop Sequani
Stop RWB
Climate Camp 2008
Oaxaca Uprising
Rossport Solidarity
Smash EDO
SOCPA
Past Major Reports
Encrypted Page
You are viewing this page using an encrypted connection. If you bookmark this page or send its address in an email you might want to use the un-encrypted address of this page.
If you recieved a warning about an untrusted root certificate please install the CAcert root certificate, for more information see the security page.

Global IMC Network


www.indymedia.org

Projects
print
radio
satellite tv
video

Africa

Europe
antwerpen
armenia
athens
austria
barcelona
belarus
belgium
belgrade
brussels
bulgaria
calabria
croatia
cyprus
emilia-romagna
estrecho / madiaq
galiza
germany
grenoble
hungary
ireland
istanbul
italy
la plana
liege
liguria
lille
linksunten
lombardia
madrid
malta
marseille
nantes
napoli
netherlands
northern england
nottingham imc
paris/île-de-france
patras
piemonte
poland
portugal
roma
romania
russia
sardegna
scotland
sverige
switzerland
torun
toscana
ukraine
united kingdom
valencia

Latin America
argentina
bolivia
chiapas
chile
chile sur
cmi brasil
cmi sucre
colombia
ecuador
mexico
peru
puerto rico
qollasuyu
rosario
santiago
tijuana
uruguay
valparaiso
venezuela

Oceania
aotearoa
brisbane
burma
darwin
jakarta
manila
melbourne
perth
qc
sydney

South Asia
india


United States
arizona
arkansas
asheville
atlanta
Austin
binghamton
boston
buffalo
chicago
cleveland
colorado
columbus
dc
hawaii
houston
hudson mohawk
kansas city
la
madison
maine
miami
michigan
milwaukee
minneapolis/st. paul
new hampshire
new jersey
new mexico
new orleans
north carolina
north texas
nyc
oklahoma
philadelphia
pittsburgh
portland
richmond
rochester
rogue valley
saint louis
san diego
san francisco
san francisco bay area
santa barbara
santa cruz, ca
sarasota
seattle
tampa bay
united states
urbana-champaign
vermont
western mass
worcester

West Asia
Armenia
Beirut
Israel
Palestine

Topics
biotech

Process
fbi/legal updates
mailing lists
process & imc docs
tech