’Like any insurance policy, it only works if premiums are paid in full and on time,’ says UN climate change executive secretary
The United Nations (UN) Conference of Parties (Cop) agreed a climate deal yesterday (24 November 2024) that UN climate change executive secretary Simon Stiell called “an insurance policy for humanity”.
Signed at the Cop 29 summit in Baku, Azerbaijan by representatives of countries around the globe, the new agreement will see richer, industrialised countries contribute £1tn ($1.3tn) per year by 2035 in funds to help poorer, developing countries transition to a low-carbon economy.
Of the £1tn committed however, only £230bn ($300bn) will be provided as grants and low-interest loans, with the rest of the total having to be raised by the private sector and potential new sources, such as levies on fossil fuels and frequent flyers.
Stiel explained: ”This new finance goal is an insurance policy for humanity, amid worsening climate impacts hitting every country. But like any insurance policy, it only works if premiums are paid in full and on time. Promises must be kept, to protect billions of lives.”
In his speech to mark the signing of the new agreement, Stiel also singled out both Brazil and the UK as nations that had committed to “whole of economy [and] whole of society” plans for climate transition.
Industry support
While Stiell described the deal as an insurance policy for humanity, the UK insurance sector has also identified the climate transition process as an area that it can lead on.
Read: Briefing: Industry needs to deliver clarity on climate approach
Read: London market has ‘real opportunity’ to be ‘an innovator’ for climate change transition risks
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Speaking at the Insurance Innovators Summit on 5 November 2024, Tara Foley, chief executive at Axa UK and Ireland said that climate change and the net zero transition was an industry-wide challenge that insurers must engage with.
She said: ”As a company, we have just released our Future Risks Report 2024 and one of the biggest concerns is the risk of conflict and the ripple effect it can have.
“I believe it is right that we play a role in raising transparency and our understanding of these risks.
“We face an environment where there is a polycrisis and with it, complex and interconnected risks.”
Zurich also recently published its new Climate Transition Plan, providing an update on its original 2019 strategy, which first outlined Zurich’s intention to achieve net zero carbon dioxide emissions across its internal operations and business arms by 2050.
The revised document additionally takes a much broader look at the transition to net zero, with Zurich setting a defined strategy to support the global economy in speeding up its transition journey.
This includes, for example, pulling on its risk management and resilience business – Zurich Resilience Solutions (ZRS) – to contribute to the creation of a public policy framework supporting the transition to net zero and exploring what public-private partnerships in this field could look like and achieve.
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