A new report has highlighted the global insurance industry’s continued failure to recognise the existential threats posed by climate change.
The Asset Owners Disclosure Project, an independent, non-profit analysed the performance of the world’s top 80 insurance companies in adapting to a low-carbon economy.
They looked at whether insurer’s had a climate strategy, targets and any risk management policies in place using both publicly available information and private surveying.
It shows that progress is being made in Europe and Japan, but that the United States seriously lags behind.
And taken as a whole, nine out of ten investment strategies in the sector weren’t aligned to the goals of the Paris climate agreement.
Analysts also found that less than 0.5 percent of the group’s estimated $15 trillion assets were placed in low-carbon investments.
Zelda Bentham, Group Head of Sustainability at Aviva, said: “It is clear from the report that there is much more to do. Increased action on addressing climate risk is needed throughout the insurance sector value chain, on both the asset and liability side, if we are to continue in our role as society’s risk manager.”
Some of the world’s largest insurers did perform well in the rankings; AXA and Aviva both topped the chart, receiving an AAA rating.
German insurance giant Allianz came in third and UK’s Legal & General climbed an impressive eight places to claim forth. The insurer received a D rating last year, but is now at AA, highlighting the progress that can be made in a short amount of time.
Japan’s Tokio Marine was the only non-European company in the top ten, having moved up six places in the past year. Overall Japanese companies showed significant improvement on climate transparency, possibly led by recent action from the government’s huge pension fund.
However, US insurers performed particularly badly with only 3 of the 24 companies assessed receiving a rating above D or X, the lowest rankings.
Katharina Latif, Head of Corporate Responsibility at Allianz, commented: “As an institutional investor and insurer we are supporting the transition to a low-carbon economy with both our insurance solutions and investments. Climate action is a strategic priority for us and we, therefore, engage investee companies as well as international policy-makers to walk the talk.”
Photo Credit: Michele Ursino/Flickr