Climate change is generally accepted as presenting the insurance industry with unprecedented levels of risk. As the probability of extreme events increases, it will become more difficult to insure against them – and at levels that may remain affordable for customers. This could not only undermine the viability of commercial insurance but also lead to a society less prepared for the future shocks of climate change. All parts of the insurance industry have a role to play in supporting the global transition to a low-carbon, climate-resilient economy. However, only a response by the industry that reflects the global nature and impact of climate change and that promotes novel, innovative and collaborative solutions, can ensure that the markets of today remain insurable ones in the future.
In recent years, green bond markets have emerged as a new way for investors in the capital markets to access sustainable investments. Cities have taken note. European cities in France and Sweden have been issuing green bonds since 2012. Municipalities in the US have a long track record of raising low-cost debt in the municipal bond market but only recently have begun to label bonds as ‘green’ in order to meet this demand signal from investors.
Much of our increasingly urban world takes access to clean water for granted, viewing it as an inexhaustible resource. Yet today, hundreds of millions of people will go without clean water and one out of three people will not have access to proper sanitation (WHO & UNICEF, 2015). In 2010, more urban dwellers were without access to water services than in 2000 (De Castro Zoratto & Ivins, 2015), and it is estimated that by 2050 the global demand for water will increase by 55% (WWAP, 2015). Meeting basic water needs will continue to be a challenge.
Over the past year, a growing number of large asset owners globally have announced that they invest in low-carbon solutions to reduce their portfolios carbon footprint, or intend to do. Our team at STOXX recently talked to Susan Dreyer, Country Director DACH Region at CDP Europe, about the power of measurement and information disclosure, the investors’ role in addressing climate change and the effectiveness of new indexes to find out more.
A thirsty crop, the coffee beans in Kagera require a great deal of water but, ironically enough, the majority of the actual coffee farmers have a hard time ensuring safe water for themselves and their families. This is a story of corporate climate action, your cup of coffee, and how people’s lives have been changed with the wide availability of household water filters.