The Insurance Council of Australia has released a paper outlining the way insurers can achieve net zero emissions for their operations by 2030 and across the entirety of insurers’ activities by 2050.
The roadmap, Towards a Net Zero and Resilient Future, was released on the 2nd of November, a week before the critical COP conference in Egypt.
Authored by Boston Consulting Group for the Insurance Council, the roadmap draws on extensive consultation with the $60 billion general insurance sector over the last 12 months.
Andrew Hall, CEO Insurance Council of Australia, commented, “As a financial service focused on risk, insurance is already bearing the cost of worsening extreme weather driven by climate change.
“Insurance customers around the country are facing a new era of extreme weather, from more intense rainfall and flooding, more severe bushfires, and projections of more intense cyclones.
“The total cost of these extreme weather events is forecast to be unlike anything we have experienced, with climate-related extreme weather events expected to cost $39.3 billion a year by 2050.”
The ICA states the the newly introduced roadmap will place insurers at the vanguard of the financial services sector when it comes to acting on the cause – not just the impacts – of worsening extreme weather.
The council notes that number of insurers are already aligned with the roadmap, while others will use the report to chart the operational and strategic changes required to meet its aims.
Hall added, “Insurance is a foundational component of the Australian economy with billions of dollars invested in industries globally, and coverage of millions of Australian homes, businesses and assets. This roadmap will play a critical role in enabling our industry to do our part in reducing emissions and achieving the goals of a net zero economy.”
Concluding, the Insurance Council states it will advocate on behalf of its members and their customers for policy settings that accelerate Australia’s transition to net zero, and work to support the wider sector’s alignment with the roadmap’s goals.
Annually, the Council will publish an update to track the progress of insurers against the report’s recommendations.