The critical journey to a successful transition to a low carbon economy will require global collaboration on a vast scale, according to John Neal, Chief Executive Officer (CEO) of Lloyds.
Executives from the specialist Lloyd’s insurance and reinsurance recently market held a virtual climate change discussion, as part of the 2021 rendez-vous de septembre conference, which was hosted by the CEO.
The discussion explored the challenges and opportunities for the re/insurance industry presented by the changing climate, the role of Lloyd’s within this, and the importance of private and public sector collaboration.
“I think we all know this (transition to a low carbon economy) won’t be easy. Indeed, there’s a reason why we, society at large, have only just properly begun our urgent and vital transition to sustainability.
“It’s because this stuff is really tough, and requires a level of global collaboration that until recent years, simply has not been easy, or possible to foster, because every action has a consequence. It has a consequence for community, it has a consequence for business, for industries, and for governments,” said Neal.
He further noted that with some of the consequences being extremely challenging, society has ignored the debate for too long and therefor not begun to take the critical actions needed.
“But we have reached a critical juncture on climate, which really started building momentum post the 2015 Paris Agreement.
“In a world undergoing enormous shift from the tangible to the intangible, in terms of its balance sheet, amidst a rapid digitalisation in both developed and developing countries. And as economies begin to rebuild in the aftermath of the COVID-19 pandemic, we know we all have a responsibility to build back not only better, but braver. And for our futures and for the futures of generations to come this is just so critical,” he continued.
According to Neal, 2021 is setting the stage as governments around the world come together to discuss, accelerate and lead shared efforts.
Following the G7 meeting back in June and next month’s G20 meeting in Rome, Neal expects to see a focus on the three main pillars; people, planet, and prosperity.
“Alongside the commitment that many nations around the world are making to take action to decarbonise, Lloyds’, and of course the global insurance industry, have a critically important role to play in supporting that transition,” explained Neal.
He continued to highlight the re/insurance industry’s experience in risk mitigation and management, disaster resilience and recovery, alongside global assets under management of more than USD 30 trillion.
“The global insurance industry is in a truly unique position to provide innovative products and services to finance, manage, and protect against the rapidly changing risk landscape our customers face, as they, themselves, transition to a more sustainable future,” said Neal.
Adding: “Although climate change poses unprecedented systemic risk, it also presents the single biggest opportunity our industry has ever seen to demonstrate its ability to provide the risk management solutions that enable and accelerate the transition to net zero across multiple industries, and many geographies.”