The chief executive of the UK government’s Environment Agency (EA) has warned that ‘mitigation alone is not enough’ in the fight against climate change – with investments needing to go beyond Net Zero.
Speaking at the Association of British Insurers (ABI) Climate Change Summit, Sir James Bevan’s remarks echoed the World Wildlife Fund, who published a ‘beyond Net Zero’ strategy and guidance in April.
“We need adaptation,” Bevan told delegates. “Changing the way we live, run our economy and build our cities so that we are resilient to the changes in climate that have already happened, and will continue to happen whatever we now do, because of the carbon we’ve already pumped into the atmosphere.”
The insurance industry is a key pillar in the fight on climate change and for whom it is in their best interest to act. More extreme weather will create more serious impact on people, homes and infrastructure, directly targeting the sector.
The best way for the industry to act, said Bevan, was through suitable investment. “It is much better value to invest early in climate resilience than to live with the costs of inaction,” he said.
The Environment Agency chief cited two initiatives which were an example of the government ‘walking the walk’. The first is the Green Finance Strategy, launched in 2019 to help investors identify opportunities which stand out both financially and environmentally; while the second, from the EA itself, is the Green Taxonomy, a framework which aims to set the bar for investments that can be defined as environmentally sustainable.
Readers of Sustainable Future News will know the relationship between sustainability and the bottom line for investors can be a strained one, with some questioning the place of certain stocks in ESG indexes. The Green Taxonomy will help provide an assurance that green investment ‘really does meet the gold standard’ and help fight against greenwashing, according to Bevan.
For its part, the ABI noted significant progress among the general insurance and long-term savings industry in setting transparent Net Zero targets, as part of the UN’s ‘Race to Zero’ campaign.
According to the association’s latest climate change roadmap, almost 90% of the long-term savings market and more than half of general insurance were now part of the campaign. Bevan noted that the insurance industry had been a ‘leader’ to this point and advised the ‘wider financial sector’ should follow suit.
Bevan ended his speech on a positive note, saying that he was ‘much more optimistic’ on tackling climate change than a few years previously. This was down to three key pillars of governments, businesses, and citizens all taking action to change their habits.
“Governments around the world are taking action, ordinary people are changing how they live, and businesses are investing in sustainable economic growth and a low carbon future,” said Bevan. “In doing that, businesses are not just doing the right thing for the planet and their customers… they are also doing the right thing for their shareholders and their bottom lines.”
