SONAR 2020 report: special features on net-zero emissions
The need to quickly move towards net-zero emissions poses a significant challenge for all players involved, changing existing risks and creating new ones for the re/insurance industry. This is why we included two special features in the 2020 edition of our yearly SONAR report, our principal means of sharing our assessment of key emerging risk trends.
“Moving to a low-carbon future”
The first of the two special features discusses how re/insurance can help mitigate risks posed by the move towards net-zero emissions in four sectors (energy, construction and manufacturing, transport, forestry and agriculture). It also draws attention to some of the general obstacles (eg long-term price dynamics, competition between different innovations) and unintended consequences (eg uneven social impacts, questions of justice and fairness, political resistance) entailed by such a large-scale transformation. It will cause significant trade-offs, gains and losses which need to be adequately monitored and balanced.
“Locking it up – carbon removal and insurance”
The second feature describes the different carbon removal solutions available – nature-based, technological, hybrid – and looks at some of the upsides and downsides of these approaches. For example, solutions requiring the use of natural resources (land and water) will be in competition with food and fodder production and will take time to develop. Technological solutions, on the other hand, will require less land, but large amounts of renewable energy. They are more capital-intensive and have higher operating expenditure.
You can find more information on SONAR under Emerging risks, and on our own net-zero commitments under Decarbonising our business model, Climate action, Achieving net-zero emissions in our operations by 2030.