Learn more about each event:
- Risk matters: making resilience add up in a Net Zero transition
- Beyond carbon: a new way to measure climate transition risk & value resilience
- Analytics matters: the bedrock of resilience
Risk matters: making resilience add up in a Net Zero transition
As global leaders and their negotiators gathered on the second day of climate talks in Glasgow, Willis Towers Watson kick started the Resilience Hub programme at COP26, with a robust conversation between thought leaders from insurance, risk analytics, academia and central banking who tackled the issues that are most pressing as countries and communities build resilience to a changing climate.
Diana Fox Carney moderated the session with questions that included:
- What role does risk analytics play in building resilience and what innovations and new approaches to risk management are emerging?
- How are central banks and regulators responding to the need for resilience?
- How can insurance bridge the huge protection gap in lower income countries?
- What is at stake when there is a lot of uninsured risk, and how can we begin to turn that around?
- What is the role of governments and financial institutions and the importance of public-private partnerships?
What does resilience mean?
Dr Nicola Ranger, Deputy Director, UK Centre for Greening Finance and Investment, University of Oxford: “The climate emergency is already here. A lot of the discussions here at COP26 about how we get to Net Zero, but we also desperately need to address the risk that people already face. In the past 18 months of covid its shown us that it cant just be about climate we have to build resilience in a much more systemic way.”
Ekhosuehi Iyahen, Secretary General, Insurance Development Forum: “When you speak to negotiators, the question of adaptation is pressing. It is the loss of lives, it is the loss of livelihoods, it is devastation to economies. And there is an urgency to think about how do we strengthen the understanding around risks that we are faced with as a community, as a society, as an economy, as people, and how do we develop solutions.”
Elsie Addo Awadzi, Deputy Governor, Bank of Ghana: “In Ghana were seeing that climate change is happening very quickly and hitting us where it matters -- agriculture cycles are disrupted, rainfall patterns have changed considerably and were seeing droughts, floods and massive displacement of communities. This is affecting not only the production cycles but also the value chains. These are real problems for central banks, and they are being fed these into our assessment of risk.”
Hopes from COP26:
Rowan Douglas: “My dream for COP26 is that physical climate risk becomes an input to credit risk because people really care about their access to credit of a country, an individual, a mortgage.”
Andy MacFarlane: “My hope would be increased awareness of the value and impact of natural assets in risk reduction or carbon sequestration become more recognised.”
Ekhosuehi Iyahen: “Better public private partnerships to work with those countries that are at the forefront of the climate crisis. The challenge for the insurance industry is to do the difficult things there are other channels for action beyond the negotiations.”
Nicola Ranger: “The first step is to bring in risk and the insurance industry is brilliant at that. But those metrics capture the risk to your own asset or investment we also need to consider the impact on society. We need to move from risk to understanding how we align financial flows with adaptation and resilience goals and have that on the same par as aligning with Net Zero goals.”
You can read the full summary here.
- Moderator, Diana Fox Carney, Willis Towers Watson
- Elsie Addo Awadzi, Deputy Governor, Bank of Ghana;
- Dr Nicola Ranger, Deputy Director, UK Centre for Greening Finance and Investment, University of Oxford;
- Ekhosuehi Iyahen, Secretary General, Insurance Development Forum;
- Andy MacFarlane, Head of Climate, AXA;
- Rowan Douglas, Head of the Climate & Resilience Hub, Willis Towers Watson;
Beyond carbon: a new way to measure climate transition risk & value resilience
Challenges to the climate transition are broad-ranging from policy and finance, to consumer incentives and technology, especially to fill the gaps in power systems around the world that the recent energy crunch has exposed.
Market signals that help move the capital required to bring about the economic and social transformations are at the heart of determining whether the world will achieve Net Zero targets.
One clear signal coming out of COP26, was that the race to Net Zero must gather pace 196 countries unanimously reaffirmed their commitment to 1.5˚C warming target, with a science-based 45% reduction in emissions by 2030 to meet that target. Furthermore, the term Net Zero appears for the first time in a UN climate agreement.