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Insurers continue to make steady progress in responding to climate change



The insurance industry is continuing to take the necessary steps to incorporate the risks posed by climate change across their business activities, an annual review of insurance industry’s global network ClimateWise revealed today.

The 2015 independent annual review of the six ClimateWise Principles adopted by members of the industry leadership group concludes that positive progress continues to be made in response to climate change, with average scores rising across almost all of the principles against 2014.

ClimateWise is a collaboration of more than 30 industry leaders spanning Europe, Asia, North and South America and Africa. Annually, members report on their progress in embedding the six ClimateWise Principles that frame their contribution to the transition to a low-carbon, climate-resilient future. They include leading on climate risk analysis and climate-resilient investment; improving customers’ climate awareness; and reducing their own carbon footprint.

The average member scores rise from 51% in 2014 to 56% in 2015. This marks steady progress, especially after the reporting requirements were tightened in 2013. No notable decreases in scores were recorded across any of the Principles or sub-Principles while significant increases were seen in response to Principle 1 (lead in risk analysis) and sub-Principle 3.4 (market penetration).

The release of this year’s report comes on the eve of the crucial COP21 climate negotiations. It also marks the end of a year that has seen growing concern by investors, insurance regulators and central banks, on the impact climate change may have on the insurance industry.  Mark Carney, Governor of the Bank of England, described climate change as a ‘mega risk’ in his speech at Lloyd’s entitled ‘Breaking the tragedy of the horizon – climate change and financial stability.’ In this context, the ClimateWise Principles continue to provide clear evidence of what a voluntary group of progressive insurance industry leaders are doing in response to climate change.

Maurice Tulloch, ClimateWise Chair and CEO of Aviva UK & Ireland General Insurance, said: “It’s remarkable how far understandings of climate change and the insurance industry have come. Even only a few years ago, it would have been considered unthinkable that a central regulator like the Bank of England would publish a report examining the potential impact of climate change for the insurance sector and its clients.

“Indeed, given the continual growth in exposure to natural catastrophes insurance cannot simply rely on a strategy of assessing and repricing risks as this may ultimately lead to uninsurable markets, thereby undermining our own industry’s relevance, and future. The ClimateWise Principles provide a clear framework that help our members to demonstrate their commitment to the societal transition to a low-carbon, climate-resilient society.”

Tom Herbstein, Programme Manager of ClimateWise, said: “As a voice of progressive insurance industry leaders globally, ClimateWise and its six Principles give members an opportunity to demonstrate to their clients, regulators and investors, their concern regarding climate change and that they are taking the necessary measures in response.

“Members are increasingly beginning to consider their exposure to climate risk in investment portfolios and the need to move capital away from sectors inherently at risk as society transitions to a low-carbon, climate-resilient future. Members are also developing their role as societies’ risk manager by innovating in terms of product development and sustainable claims processes.”

Jon Williams, Partner at PwC UK, which conducted the independent review, said: “With all eyes on climate negotiations in Paris at the end of 2015, it is no surprise that there has been a marked rise in the interest in the risks climate change presents to the insurance industry, from regulators such as the Bank of England, and investors in the sector.

“Going forward this interest will manifest itself in greater expectations on disclosure by the industry to demonstrate analysis and integration of the physical and transition risks in both underwriting and investment decisions. As Independent Reviewer of the ClimateWise initiative, we are pleased to see that, already in their seventh year of reporting performance against the Principles, members continue to raise the bar on demonstrating management of climate risk.”

This report describes the latest climate change context for the insurance industry and presents perspectives from both investors and regulators on the role voluntary disclosure plays in communicating an insurer’s exposure to climate risk. It also reviews member performance across the ClimateWise Principles. Based on their annual submissions, each ClimateWise member is given a private ranking that allows them to benchmark progress against their peers and to inform their strategic planning. Case studies of innovation and good practice are highlighted throughout the report.

Read the 2015 ClimateWise Principles Annual Review.


Will Self-Driving Cars Be Better for the Environment?



self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo |

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.


Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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