Regulatory risks: climate change
In view of the strategic importance climate change has for our core business, we closely monitor related regulatory developments. Governments’ and regulators’ interest in climate change and natural catastrophes has continued to build, leading to an increase in climate-related reporting requirements. For example, in a number of US states insurance companies that are domiciled or licensed there and write USD 100 million or more in direct premiums are required to complete a survey on climate change risks; and in the UK listed companies need to disclose their greenhouse gas emissions in their annual reports. Governments’ growing awareness of the risks posed by climate change has helped to prepare the ground for a new global climate deal on which they agreed at the 2015 United Nations Climate Change Conference in Paris (COP21). Its central objective is to cap global warming at 2° C over pre-industrial levels. (See special section “Swiss Re’s contribution to the COP21 Climate Change Conference”.)
During the COP21 negotiations, it was also announced that the Financial Stability Board (FSB) would establish a Task Force on Climate-Related Financial Disclosures, TCFD (www.fsb-tcfd.org). The FSB is an international body that monitors and makes recommendations about the global financial system, coordinating national financial authorities and international standard-setting bodies. Starting from the premise that climate change creates physical, liability and transition risks, the TCFD aims to develop consistent and effective financial disclosures that will allow stakeholders to properly assess the climate risks faced by companies and to take appropriate actions. Swiss Re supports the task force and provides one of its members.