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Editorial: Unpacking the implications of COP26

Editorial: Unpacking the implications of COP26 | Insurance Business UK

Editorial: Unpacking the implications of COP26

COP26 provides that rare intersection wherein the mainstream media and the (re)insurance industry can inform the other about what the year ahead holds in store; and where industry can meet with government, regulators and activists alike to communicate intention, ambition and action plans. And whether your go-to morning news is delivered by broadsheets, tabloids, trade press, or online news outlets, it is hard to have missed the plethora of headlines surrounding COP26.

Whether your interest has been piqued by David Attenborough’s warning that world leaders must “act now” on the climate crisis before it is too late for the planet, or by the news that Bonnie the seal has been recycled from the 2018 European Championships in Glasgow to re-emerge as the mascot for the climate summit talks – there’s a lot to be unpacked from COP26.

For almost three decades now, countries across the world have come together for this global climate conference and, in the past, COP26 has played host to many pivotal moments in the fight against climate change. At COP21 in Paris, the Paris Agreement was born when every country agreed to work together to limit global warming to well below 2 degrees (and aim for 1.5 degrees), and to reconvene every five years with an updated plan reflecting their ambitions. This year, Glasgow will welcome delegates (albeit delayed by a year due to COVID-19) to provide that update.

Read more: Insurers join business sector call for climate action

For insurance companies, the run-up to COP26 has been an opportunity to roll out a variety of innovative schemes and initiatives around this complex topic, to promote wider industry engagement. There’s the new scheme being launched by Zurich to encourage incremental steps to change attitudes around climate concerns. Flood Re is undertaking a week-long tour of flood-prone cities to raise awareness for resilience measures. Meanwhile, several insurance firms have taken part in a coalition of over 80 UK businesses calling for Prime Minister Boris Johnson to show “strong domestic leadership” in acting on climate change.

These efforts could not be better timed. The spotlight of COP26 may be the main spotlight revealing action and inaction alike, but it is set off by a variety of other smaller, but no less bright, floodlights. A new wave of climate activism has seen motorways across the UK being blocked, major protests have been held at the headquarters of Lloyd’s of London, while members of the UK Student Climate Network (UKSCN) recently staged a ‘sleepover’ at the London Science Museum to protest fossil fuel sponsorship.

Read more: Returning Lloyd's of London professionals met with climate protest

These campaigns are nothing new, but there is a steady uptick in the frequency of these demonstrations and in the publicity that they are garnering, which holds a key message for insurance firms – climate risk does not belong to any single month in the calendar. The AXA Future Risks Report 2021 published in September identified this clearly – climate change is ranked as the top risk facing the world in the next five to 10 years – as agreed by 64% of risk experts in the UK, as well as 59% of the UK general public.

This finding was likely of no surprise to most readers as it seems every other week unveils a new report into the detrimental potential of climate-related risks to devastate communities and economies. And the weight of both legitimate climate protests and their less justifiable brethren is weighing on communities – and lending itself to a renewed understanding that when it comes to the subject of climate risk, we are all stakeholders.

Whenever a global conference such as COP26 occurs, there is always the (somewhat) reasonable concern that the flurry of attention and excitement revolving around the task at hand may trail off after the event is over and the delegates have returned to their respective homes. With anxiety around the implications of climate risk - be those financially, societally, or politically motivated - at what appears to be an all-time high, it is up to individual companies, alongside governments and regulators to carry on these conversations post-November 12.

COP26 offers a snapshot of the international commitment to climate action that does exist, and an opportunity for insurance firms of all shapes and sizes to open up a greater dialogue with clients. And, as emphasised by Zurich’s Conny Kalcher, this does not need to centre just on the efforts being made by insurance brands, but also on the ways in which individuals, families and clients’ businesses can be encouraged to take those steps themselves.

The insurance profession has a chance to be leaders for change at a time when change is being less expected than demanded by the wider world. And it is entirely up to every individual person and business whether that opportunity is embraced, or simply pushed down the road to be encountered once more at the next annual United Nations climate change conference.