Sustainability in our business: climate change adaptation
Integrating adaptation to climate change with economic development and sustainable growth
Natural catastrophes are a key risk in our business. Losses from floods, storms, earthquakes and other disasters affect millions of lives and the economies of entire countries. Providing effective re/insurance protection against natural catastrophes therefore has large social and economic benefits.
Insured natural catastrophe losses around the world are becoming more frequent and severe as people and assets concentrate in high-risk areas. Climate change is likely to contribute to this rising trend in losses through shifts in the frequency, intensity, spatial extent, duration and timing of extreme weather events.
We work to mitigate the impact of natural catastrophes, first by issuing re/insurance covers and insurance-linked securities, but also by offering our clients and others access to our strategic expertise. This include our wide range of expert publications, our CatNet® online hazard information system, and our Economics of Climate Adaptation (ECA) studies. A collaborative project informed by an advisory group of leading academics, ECA looks at the costs to governments and associated investment implications of adapting to climate change. With a time horizon of 2030, the ECA’s fact-based risk management approach enables national and local leaders to understand the impact of climate on their economies and to identify actions to minimise that impact at the lowest cost to society, thus integrating adaptation to climate change with economic development and sustainable growth. The initial ECA studies covered eight widely varying locations to test the relevance of the approach and the robustness of the results. In 2013, we had the chance to apply the methodology in collaboration with the city of New York, an area potentially at great risk from climate change (please see Living up to our corporate responsibility of the Business Report for a full description).