According to Dr Jorgen Zech, Chairman of the Gerling Group, “Gerling believes that there are important opportunities in the sector, especially when we can combine the expertises of such a broad group of leading companies. We have decided to invest in the new Sustainability Fund because we believe that sustainable companies are generally better managed.”

The initiative was announced in Oslo yesterday at the annual meeting of the United Nations Environment Programme’s Insurance Industry Initiative, entitled “Natural Capital at Risk”. UNEP says the Oslo conference, which brought together over 120 financial services executives (insurers, investment companies, banks, brokers and pension funds) from Africa, Asia, North America and Europe, is expected to mark a watershed in the evolution of the insurance industry’s stance on the environment.

“Our investment policies, for instance, will undergo some serious changes,” said James Martin, Chairman of Innovest Strategic Advisors Inc. and former CEO of TIAA- CREF, the largest North American pensions fund. “Just now we see the flourishing of new ethical and environmental funds all over the world, as noted recently in Japan. Fund managers can visibly show that including environmental and social criteria is both possible and can make financial sense. Those gathered here today will shape the destiny of the future.”

The insurance industry has witnessed a dramatic increase in weather-related insured losses in recent years. In 1995, leading companies founded the global Insurance Industry Initiative together with UNEP. Based on a voluntary commitment, members of the UNEP Initiative signed a Statement of Environmental Commitment by the Insurance Industry and agreed to include environmental considerations within their internal and external business operations.

“As a key player in the globalisation of the world economy, the financial services sector, and in particular the insurance industry, can play a major role in promoting environmental protection and sustainable development”, said Klaus Toepfer, UNEP’s Executive Director and Under-Secretary-General of the United Nations. “It is now time for aware and active insurers and banks, acting as responsible global citizens, to move from assessing the environmental challenge to implementing solutions. I therefore challenge all insurance companies to report publicly on their environmental performance.”

Kyoto offers business opportunities

The implementation of the Kyoto Protocol offers business opportunities for the insurance sector once the modalities have been adopted, says a study on the possible implications for insurers of the Kyoto Protocol, presented at the conference.

“The Climate debate remains one of the most important issues for the insurance sector”, says Mr Korsvold, President and CEO of Storebrand Insurance. “Environmental disasters around the world caused the death of 50,000 people and these disasters are estimated to have costed society $90 billion,” he said.

“Insurers can play an important role through guiding their financial flows towards more environmentally friendly investment initiatives”, said Jesper W. Simonsen, Norway’s State Secretary for the Environment, “By recognising the importance of cleaner production in their insurance coverage and investment activities, they can help by making growth more sustainable.” Simonsen also announced that Norway would sign the UNEP International Declaration on Cleaner Production.

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