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  • Blog: Michel M Liès, Swiss Re on why insurance is part of the climate solution

    While negotiators work through the night at COP21 in Paris, Michel M Liès, Group CEO of Swiss Re, blogs on the importance of building climate resilience.

    Agreeing how to get the world on a ‘two degrees pathway’ is at the heart of the climate change negotiations. This is essentially saying that to avoid the most dangerous effects of global warming we must minimize the average global temperature rise to 2°.

    And even if we do limit global warming to within this threshold, some regions of the world will still suffer severe consequences resulting from an increase in extreme weather events, sea level rise, changes in growing patterns of crops and the spread of diseases.

    We know that without urgent and sustained action we run the real risk of four degrees Celsius or more of global warming by the end of the century. You only have to think back to Hurricane Sandy to understand what that might entail. On Sandy’s long path from the Caribbean up along the U.S. east coast and into Canada in 2012, more than 200 people lost their lives. Sandy also cost the affected economies billions of dollars in damaged infrastructure and lost revenues – where insured losses alone amounted to USD 36bn.

    Often though, it’s the most vulnerable societies that are the hardest hit, impacting hard-earned development gains and obstructing economic growth.

    At Swiss Re we have developed a range of services to support different kinds of communities hit by natural disasters, based on the nature of the environment and area in which they live.

    In Sub-Saharan Africa, for instance, droughts are becoming a major problem for farmers, be it small holders or large-scale commercial. Insurance can reduce big economic risks, by bridging the gap in the financial systems. With the products we offer, banks maintain their confidence to issue loans to small holders, providing the liquidity they need to survive.

    A wider involvement of the private sector is key to ensure more insurance services are scaled up and the most vulnerable communities are covered. National-level government leadership on adaptation is of critical importance in this field. Only bold supportive policy environments can catalyze broader private sector engagement and facilitate scale-up and replication of effective approaches which are already underway.

    Nevertheless, building climate resilience is not just about how we support others; Swiss Re is also working very hard to minimize its own carbon footprint. That is one of the reasons why we’ve signed up to the RE100. It’s only by actively supporting the drive towards a low carbon future that we as corporate citizens can also take advantage of the growing market that exists with these climate change solutions. Collaboration between businesses, governments and communities will be essential to deliver workable adaptation solutions. This will not only improve quality of life in the short term, but ensure that lives are being protected well into the future.

    This piece was originally published on December 2, 2015, in the We Mean Business special COP21 series The Bottom Line.