Climate change will drive up premiums
A major player in the world of finance has teamed up with WWF to warn that climate change is bad for business and, if nothing else, will see insurance premiums soar as underwriters start to take into account the increasing risk of severe weather conditions.International financial services provider Allianz Group has joined forces with the conservation charity to produce a report looking at how the insurance, banking and asset management sectors will have to adapt as the climate continues to change.
And as a symbol of its serious intent, Allianz pledged to invest an extra €300 to 500 million in renewable energy over the next five years at the launch of the report, Climate Change & the Financial Sector: An Agenda for Action.
"Climate change creates significant costs for the financial industry," said Dr Joachim Faber, Allianz AG board member.
"In the interest of our clients and shareholders we are obligated to take these risks into account when making decisions on insurance underwriting, investments, or lending credit."
Robert Napier, chief executive of WWF UK, said financial institutions could play a major role in tackling climate change, by investing in a sustainable future and steering business towards reductions in carbon emissions.
"WWF and Allianz want to cooperate further to develop new tools for climate risk assessment, and show how leading financial companies can help manage the transition to a clean energy economy," said Mr Napier.
The unlikely alliance now wants to put pressure on the G8 leaders not to brush the realities of climate change under the carpet when they meet in Gleneagles next week.
Allianz and WWF are calling for a clearer policy framework to adjust long-term investments and credit lending for banks and investors accordingly.
"Businesses need to play their part but they rely on a stable and clear political direction," said Mr Napier.
"The G8 leaders must come up with a clear plan of action to combat dangerous climate change.
"They must ensure that the G8 sends a clear signal that emissions will be cut and carbon markets will continue long into the future."
By Sam Bond