Co-operative and mutual insurers were represented at a high-level UN panel discussion on best practices that simultaneously address climate action and the challenges exacerbated by the pandemic.
The hybrid meeting, Delivering Climate Action – for People, for Planet & for Prosperity, took place on 26 October at the UN headquarters in New York and formed part of the 76th President of the United Nations (UN) General Assembly.
The chair of the International Cooperative and Mutual Insurance Federation (ICMIF), Hilde Vernaillen, contributed to the Multi-stakeholder Panel on Bridging the Gap to 1.5 Degrees Target.
Ms Vernaillen, who also chairs the management committee of Belgian insurance co-op P&V Group, described the work of the mutual and co-operative insurance sector, which represents almost 30% of the world’s insurance market and US$10tn in assets.
“Insurance as an industry is uniquely positioned to make people and our planet more resilient,” she said, “as it has both the assets to invest in and, on the other side, the knowledge of the risks that need to be mitigated, both at the macro level and at the community level.
“When it comes to financing and showing leadership we are really doing our bit and much of this financing is in the form of green bonds, social bonds, resilient bonds, and increasingly this funding is measured by impact investments.”
ICMIF’s members are collectively investing US$570bn in responsible investments, such as green bonds, social bonds and resilience bonds; many of which will be targeting climate change and its effects. Ms Vernaillen argued that the federation’s partnership with the United Nations Office for Disaster Risk Reduction (UNDRR) has the potential to bring about “the real systemic change that the planet needs”.
In April 2021 ICMIF and the UNDRR published a joint report on the role of co-operative and mutual insurance in disaster risk reduction which summarised seven mechanisms for supporting disaster risk reduction and resilience that ICMIF members are working with to embed the Sendai Agreement into their businesses. The apex is now monitoring and benchmarking the application of the mechanisms among its membership.
The partnership, which started in 2019, is rolling out pilot initiatives to bring together the investment and risk parts of member organisation’s businesses. As part of this, insurers will invest in resilient infrastructure projects that need funding via a sustainable investment mechanism to realise projects that have climate, disaster risk reduction and/or resilience outcomes. Each stakeholder will also be asked to consider their investments in a different way and to work in partnership to deliver resilient outcomes.
Ms Vernaillen said the pilot would be scalable across all the countries and could make communities more resilient.
“We don’t leave anybody behind because mutuals are all about being inclusive,” she said.
The panel also highlighted the importance of intergenerational dialogues and public-private partnerships in tackling the climate crisis.
Sara Maria Cognuck Gonzalez, UNICEF Climate Champion, said young people faced challenges when trying to secure financing for green projects, often needing 10 years’ work experience in the sector.
Allen Blue, cofounder and vice president of product management, LinkedIn said: “The solution will requires everybody to do something and we all have to do it together.”
He called on financial institutions to look for places where investment in green financing is low and fill those gaps as quickly as possible, rather than adopting a careful approach and expecting a return on every investment.
Richard Mattison, president S&P Global Sustainable1, and CEO S&P Global Trucost, said green finance needs a clear definition. Another aspect to take into account is that the impact of investments will vary depending on which part of the world this is being spent in. He added that green financing also needed to take into account resilience to existing climate challenges, not just transitioning to greener options.
Damilola Ogunbiyi, CEO and special representative of the UN Secretary-General for Sustainable Energy for All, and co-chair of UN-Energy, said it is vital that less developed countries are not left behind when green investments are made.
The UN Framework Convention on Climate Change acts as the primary international and intergovernmental forum for negotiating the global response to climate change. However, the UN General Assembly also focuses on fostering political consensus, raising awareness and giving strategic direction to the UN system. The meeting aimed explore how to bridge the gap between current and required technical and financial capacities to achieve the 1.5 degrees target.