The general insurance and long-term savings industry is making significant progress in setting transparent net zero targets but needs to “take the hand brake off”, says Andy Briggs Chair, CEO, Phoenix Group and chair of the Association of British Insurers’ Climate Change Committee.
He was speaking as the ABI published its latest Climate Change Roadmap during its Climate Change Summit this week, reports Contributing Editor David Worsfold.
“The long-term savings and insurance sector is committed to playing a central part in the race to net zero – but we need to take the handbrake off. There is no time to spare in making the changes needed which can unlock the once-in-a-lifetime opportunity to drive investment which can cut emissions and deliver growth across the country.
“Meaningful reform to investment frameworks and the regulatory regime, including Solvency II, is essential if our sector is to turbocharge investment in the green infrastructure that we urgently need. If we can get those structures in place – supported by better planning systems, transparent data, and clearer climate change policies – we can put our foot even harder on the throttle”.
In the report, the ABI points to the progress UK insurers have made in meeting the net zero objectives. Among the market share represented by its members, almost 90% of the long-term savings market and over 50% of the general insurance market are now part of the United Nation’s Race to Zero global campaign. More firms are expected to follow. A survey of ABI members showed that 94% of respondents not already signed up are considering joining the campaign.
The ABI says further progress depends as much on government action as it does on insurers making firmer commitments: “While the figures show good progress on the industry’s net zero targets more action is needed. As the industry convenes today for the ABI’s Climate Change Summit, five urgent requests for Government are set out by the sector that would enable the insurance and long-term savings sector to maximise the vital role it has to play”.
It set out its five demands, many of which will be familiar to readers of the Insurance Investment Exchange, but which continue to be expressed more forcibly everything the ABI presses on this topic.
- Strengthen the industry’s role as key investors in net zero infrastructure: let us put more of our capital into green investments and ensure we are central to the conversation about how green infrastructure is developed and funded. Unlock the significant investment potential from the insurance and long-term savings industry through meaningful reform of the Solvency II regulatory framework, and bring investors into the heart of the decision-making process on green infrastructure and technology development.
- Publish a strategy for delivering the required investment in reducing carbon emissions in homes and commercial buildings. The UK has a strategy to decarbonise the entire transport system – we need to set out the same clarity on targets for the UK’s building stock that delivers energy efficiency and low carbon heating without increasing any building safety risks. This can enable the sector to support not just lower emissions but a just transition offering lower bills and warmer homes.
- Improve the planning system to ensure net zero alignment, including by reducing development in high flood risk areas and ensuring new homes are resilient to climate risk. This must be underpinned by a long-term funding commitment to investing and maintaining the UK’s flood defence infrastructure.
- Ensure all sectors produce consistent and quality data on carbon emissions. Businesses cannot accurately calculate progress towards net zero targets without consistency across the carbon emission data published across their full portfolio.
- Put the protection of the natural environment and our ecosystems into climate change policies. Net zero targets alone are not enough. The Dasgupta Review sets out how we can achieve sustainable economic growth while ensuring the demands on nature do not exceed its supply. We need government guidance on how businesses should respond to this – customers and international regulators are asking us.
ABI’s latest Climate Change Roadmap.