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Ethical insurance: protection for the days when it goes wrong

Insurance is for those days when not everything goes quite to plan: a way to be prepared for uncertain loss. Insurance companies are there to fall back on when misfortune strikes.

But like most other types of finance, insurance companies are largely not taking green and ethical considerations into account. Charlotte Reid and Rob Steadman look at the state of ethical insurance.



Insurance is for those days when not everything goes quite to plan: a way to be prepared for uncertain loss. Insurance companies are there to fall back on when misfortune strikes.

But like most other types of finance, insurance companies are largely not taking green and ethical considerations into account. Charlotte Reid and Rob Steadman look at the state of ethical insurance.

The UK insurance industry is the third largest in the world and the largest in Europe. According to a recent report by the Office of National Statistics (ONS), the UK insurance industry was worth more than £117 billion in 2010. It is a vital part of the UK economy, managing investments amounting to 26% of the UK’s total net worth.

However, the insurance industry grasps the importance of environmental issues because it frequently has a direct impact on their work. For example, as climate change makes flooding a much more regular occurrence it is the insurance companies that have to pay out more in claims.

According to the Association of British Insurers, the damage caused by the summer floods back in 2007 cost the industry £3 billion. This is now being felt by customers who have been warned that house insurance premiums could rise for homes that are at a risk of flooding.

“Customers want an insurer who treats them fairly and responsibly”

The key question regarding ethical insurance is to know which shares the money is invested in. This didn’t happen until February 2011, when The Co-operative Bank became the first to ethically screen who they were investing in.

This was introduced as part of The Co-operative’s new Ethical Operating Plan, which encouraged their customers to join the revolution in order to build a more sustainable economy.

One of the key targets of the plan is to introduce the world’s first ethically screened general insurance product, which will support over two million policies.

A spokesperson for The Co-operative Banking Group said, “The unique ethical policy that underpins the ethos of The Co-operative Bank will now be applied to its general insurance (GI) arm, meaning that none of the £18 billion of assets held by both The Co-operative Bank and The Co-operative Insurance’s GI business will be invested in companies that do not meet strict ethical criteria”.

The Co-operative thinks there is a demand for ethical insurance as they believe that “customers want an insurer who treats them fairly and responsibly“.

Other insurance policies available

Other policies are mostly not as strict as The Co-operative, and nor are they as general.

The Green Insurance Company pays for offsetting carbon dioxide emissions, but this time on cars as part of their motor insurance policy, as well as offering discounts for more environmentally friendly cars.
Kew Insurance’s Simply Green insurance policy rewards environmentally friendly behaviour around the home with a 5% discount.

Meanwhile, Ansvar Insurance Co Ltd offers a wider spectrum of insurance deals, covering home, motoring and travel.

Naturesave offer very similar terms to Ansvar Insurance, but also cover personal accident and illness. This is as well as putting 10% of its personal premiums in a fund that helps environmental and conservational projects, and offering clients a free environmental review whilst trying to use suppliers that support sustainable business.


Insurance companies have their own form of risk management in the form of reinsurance.

Only a select group of companies deal with reinsurance worldwide, so it is unlikely to find an ethical one.

However, the reinsurance industry is aware of the impact of global warming, as they also feel the consequences of it in their work.

Reinsurance companies are large investors, playing an important role in the choice of companies to invest in. Companies could, in theory, face increasing pressure from these investors to reduce carbon dioxide emissions and to prove that they will reduce their emissions in a cost effective way.

Essentially, if climate change continues in the way that is predicted, then reinsurance companies are set to make huge losses.

Munich Re and Swiss Re, two of the world’s largest and leading reinsurers in the world, believe it is a social responsibility of a company to have a small environmental impact.

Reinsurance companies want to help gain an understanding of climate change, and Munich Re helped to set up the Munich Climate Insurance Initiative (MCII), which supports developing countries adapt to climate change.

On top of that, Munich Re, working alongside the London School of Economics Centre for Climate Change Economics and Policy, helps others to understand climate change, too. This collaboration was set up to look at the current state of climate modelling, and to improve the way that this information is then used.

For the past 20 years, Swiss Re have similarly been working on gaining more of an understanding of climate change, and have helped with the development of products such as weather risk insurance and other insurance products tailored to specific situations.

As well getting more information about climate change and the impact of it, the companies have also been offering incentives. Swiss Re offered their employees benefits and rewards for lowering their carbon footprint; refunding them up to 5000 Swiss Francs if they invest in technologies that work on reducing CO2 emissions.

Meanwhile, Munich Re was involved in the world’s first insurance of Fuhrlander, the German builder of wind farms, insuring the guarantees given to its customers. This was to help underwrite the risks of the renewable sector, making it seem attractive to investors and helping future growth within the field.

What to do

For the ethical and conscientious people out there, checking both your insurance company’s investments and the nature of their reinsurance may give you that extra peace of mind in your desire for a blue and green tomorrow.  

If you would like to know more about ethical insurance and reinsurance, ask your financial adviser if you have one, or complete our form and we’ll connect you with a specialist ethical adviser.


How Going Green Can Save A Company Money



going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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5 Easy Things You Can Do to Make Your Home More Sustainable




sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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