With the 26th UN Climate Change Conference of the Parties - COP26 - opening in Glasgow, Stephen Hodgson takes a timely look at how environmental issues will increasingly impact the commercial insurance sector.
Today world leaders are converging on the Scottish Event Campus to kick off nearly two weeks of talks.
It's to be hoped COP26 will generate more than thermal currents; we don't need more hot air.
The conference's subtitle is bold: Uniting the World to Tackle Climate Change.
The aims are certainly lofty. They include delivering global net zero carbon emissions by 2050.
This will require accelerating the phase out of coal and the adoption of electric vehicles. In addition countries will need promote investment in renewables and reduce deforestation.
Looking at ESG ASAP
Whether the globe's great and good can hammer out an effective agreement - and deliver it - remains to be seen.
Regardless, UK businesses are going to need look at their own environmental footprints.
That's not simply through a moral obligation but necessity. Insurers are increasingly placing ESG - Environmental, Social and Governance - issues at the heart of what they do.
In March Aviva, the UK's largest general insurer, announced a plan to become a Net Zero company by 2040. The insurer is committed to securing "real world change."
This, for example, will see the company reducing its exposure to coal not just in the investments its make, but the business insurance it underwrites.
It is acting now, saying that "by the end of 2022, we will have divested all companies making more than 5% of their revenue from thermal coal unless they have signed up to Science-Based Targets."
Industry body the Association of British Insurers' has also set a 2025 deadline for firms to have set targets and frameworks for achieving Net Zero by 2050.
It's Climate Change Road Map demands that "By this point, firms should have reached Net Zero within their own directly controlled emissions and reported transparently on progress."
Climate change issues also fall under the wider remit of ESG risk factors upon which insurers are placing increasing focus.
Businesses need now be aware that ESG will be increasingly integral to insuers' risk assessments. In addition, as Aviva is already demonstrating, it will also impact the nature and availability of commercial insurance.
That may sound both worrying and daunting. However, insurers and professional commercial insurance brokers such as RBIG will be keen to support their clients in meeting risk criteria.
As insurers' adapt their corporate policies and underwriting criteria, we will be on hand to advise what they mean to individual businesses and provide guidance on how best to meet them.
Drawing upon some 40 years' commercial insurance experience and our long established relationships with key insurers, we will ensure our clients our aware of the necessary protocols and documentation required to satisfy insurer expectations.
If you want to discuss the potential impact of ESG on your business you can email Stephen Hodgson here or call him on 0161 304 5004.