Episode 21: Election debrief, climate risk insurance and philanthropic finance
Jul 29, 2024
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This discussion features Rachel Delhaise, group head of sustainability at Convex Insurance, and Kate Turner, global head of responsible investment at First Sentier. They delve into the critical role of climate risk insurance in fostering resilience against extreme weather events. The importance of philanthropy in sustainable finance is explored, especially regarding funding for agriculture in vulnerable nations. They emphasize the urgent need for collaborative strategies to address emerging environmental challenges and promote sustainability.
Philanthropy's proactive role in climate resilience emphasizes funding initiatives aimed at disaster preparedness and community support against climate challenges.
Insurance, especially in high-risk areas, is crucial for facilitating climate action investments, highlighting the need for the insurance industry to adapt to climate adaptation demands.
A comprehensive ESG strategy is vital for investors to effectively engage with companies, requiring transparency around emissions and sector vulnerabilities for sustainable transitions.
Deep dives
Philanthropy's Shift Towards Climate Resilience
Philanthropy is evolving to take on a more proactive role in addressing climate challenges, particularly through focusing on climate resilience and adaptation rather than solely mitigation efforts. For instance, organizations like Community Jameel are emphasizing early warning systems and disaster preparedness as crucial components for supporting communities affected by climate change. By funding high-risk research that may not have guaranteed outcomes, philanthropy can catalyze positive impacts, where even one successful initiative greatly benefits affected communities. This shift is reflected in the commitment to financing projects that enhance community resilience against climate-related disasters.
Insurance's Critical Role in Climate Action
The importance of insurance and reinsurance in managing climate risk was highlighted, especially in relation to securing investments for decarbonization projects. Convex Insurance emphasized that without insurance, many necessary climate actions might not proceed, indicating that the industry's expertise in risk assessment is crucial for both mitigation and adaptation efforts. Insurers must evolve their practices to engage with clients about their transition plans, focusing on climate adaptation as well. Moreover, there is a significant need to increase insurance coverage in climate-vulnerable regions, enabling communities to withstand and recover from climate-related hazards.
The Need for Comprehensive ESG Strategies
A comprehensive Environmental, Social, and Governance (ESG) strategy is essential for investors navigating the rapidly changing landscape of global financial risk. This includes recognizing the interconnectedness of various ESG issues, such as climate change and human rights, to enable a more effective engagement with companies. Companies must prioritize transparency and invest in understanding their emissions profiles and sector vulnerabilities while engaging with investors early on. Such strategies will help firms align their operations with broader sustainability goals and transition successfully towards a more sustainable economy.
Government Policies and Their Impact on the Net Zero Transition
Government policies play a critical role in shaping the pathway to a net-zero economy, as evidenced by recent legislative shifts in the UK. These include lifting planning barriers for onshore wind projects and establishing a national wealth fund to support low-carbon sectors such as electric vehicle manufacturing. However, there's an acknowledgment that despite recent progress, significant challenges remain across various sectors, particularly in transport and heating, where action has been historically lacking. Clarity and swift implementation of new policies are necessary to harness the momentum generated by recent measures and ensure collective progress toward net-zero emissions.
Data Gaps in ESG and the Importance of Local Knowledge
Navigating the complex world of ESG investing is hindered by significant data gaps, particularly concerning biodiversity and human rights issues. Firms are prioritizing areas where data availability is better, such as deforestation and freshwater resources, to formulate strategies that address these challenges. Additionally, understanding the interplay between different ESG issues allows for more meaningful company engagements. The emphasis on equitable access to financing and embedding local knowledge into research underscores the need for more robust and inclusive ESG frameworks that focus on real-world implications for communities.
The latest episode of edie’s Sustainability Uncovered podcast is streaming now, with three new and exclusive interviews with expert guests speaking on finance for a more climate-resilient future, plus a news-in-brief recap of green policy changes made by the UK government post-election.
Our hosts are edie's editor Matt Mace, content editor Sarah George and reporter Sidhi Mittal.
Our guests are:
Rachel Delhaise, group head of sustainability at Convex Insurance
Kate Turner, global head of responsible investment at First Sentier
Uzma Sulaiman, associate director at Community Jameel
Sustainability Uncovered, hosted in partnership with Lloyds Bank, uncovers some of most inspiring and insightful sustainability and climate action stories from across the globe. The show features live in-the-studio guests, leader interviews, need-to-know round-ups, listener quizzes and more – all wrapped up into monthly episodes.
Whether you’re a business leader, climate expert, environmental professional, youth activist, or just have a passion for all things sustainability and climate action – this podcast is for you!
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