Alliance of CEO’s call on G7 & world leaders to scale up climate risk transfer

With the G7 meeting in Cornwall, UK beginning tomorrow and the COP26 only five months away, CEO’s of major global corporations are calling on world leaders to scale up climate risk transfer as part of the financial response to climate change.

The Alliance of CEO Climate Leaders is a global community of Chief Executive Officers convened by the World Economic Forum and the group calls on the G7 and all other world leaders to accelerate actions in relation to climate change.

The CEO’s call for “bold action now for a just transition.”

Explaining, “With the ongoing challenge of the COVID pandemic, it is easy to forget that climate change is an immediate and growing threat to people, ecosystems, and economies – with our current trajectory leading us to potentially irreversible outcomes.

“To avoid the worst impacts of climate change we need to limit warming to 1.5°C, which will require nearly halving greenhouse gas emissions by 2030 and reaching net-zero by 2050. This drastic departure from today’s emissions growth trajectory requires bold action across private and public sectors five months before COP26 in November.”

Businesses are already stepping up, the CEO’s explain, but they want world leaders to step-up and “to deliver on our shared climate ambitions and enable a net-zero world – and additionally to work together with the private sector for bolder actions on shared ambitions within a clearer and more ambitious policy framework.”

Calling for “transformative policy change” the Alliance of CEO Climate Leaders highlight the need for investment in climate adaptation, which also calls for climate risk transfer efforts to be increased.

World leaders should, “create resilient cities and infrastructure by scaling natural disaster defences and risk transfer solutions, for example by advancing climate-resilient, sustainable food production and securing water supply,” thee Alliance of CEO’s explains.

Importantly, they add that “climate- related risk transfer mechanisms” need to be boosted, as part of increasing green finance approaches.

Clearly the global insurance, reinsurance and insurance-linked securities (ILS) industry’s are going to be at the heart of providing new climate risk transfer solutions to support global adaptation efforts and the calls for greater use of risk transfer and for risk transfer to be embedded in the global response to climate change are increasingly loud.

As we reported earlier this week, United Nations (UN) Secretary General António Guterres said that the world needs more catastrophe-triggered financing and better instruments to support the delivery of climate financing, to enhance disaster resilience, fund adaptation measures and finance climate risk.

Now these 79 global CEO’s of major companies (including Swiss Re CEO Christian Mumenthaler, Allianz CEO Oliver Bäte, AXA CEO Thomas Buberl and Zurich CEO Mario Greco) around the world are calling on world leaders to accelerate and expand the use of climate risk transfer.

This year could be pivotal in the insurance, reinsurance and ILS market showing how it can enable better supported and financed climate adaptation, through the embedding of climate risk transfer within the world’s transition plans.

Embedding insurance-like mechanisms within climate financing, development, planning and adaptation can help to better protect economies and lives while the world races to its net-zero targets and works to heighten its climate resilience.