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Podcast 21 mins
On Aon Podcast: Better Being Series Dives into Women’s HealthIn November 2022, leaders and subject matter experts convened in London to discuss better decisions as part of the Aon Aon Insights Series 2022. In a session entitled Addressing Climate Change and Supporting Net-Zero Strategies, panelists discussed the challenges and opportunities organizations face in their journey to net-zero.
Throughout the session, key themes of collaboration, innovation and diverse perspectives emerged as pivotal components of climate transition. Speakers discussed the importance of building an ecosystem of partnerships with thinkers and scientists from around the world in order leverage their expertise to solve today’s pressing climate issues.
This is part of a series of The One Brief articles examining the impacts of climate change. The following exchange has been condensed and edited for clarity.
William Bruce, global head of climate risk consulting, Aon: I think there are of three broad areas that are industry-agnostic. The first one is time horizon. In our industry in particular, we tend to look at a 12-month cycle. But within climate risk, we might look at risk going out for decades. We’re having to reconcile long-term time horizons with short term fluid assumptions — such as what the energy mix is going to look like, what the carbon price is likely to reach, and what the regulatory environment’s doing.
The second area is organizational. We have well-intentioned, incredibly professional sustainability experts who are going out and trying to move their organizations forward and meet guidelines set by the Task Force on Climate-related Financial Disclosures (TCFD). But we also have risk folks. It’s trying to bring the two skills together: the initiatives and opportunities around sustainability — around climate in particular — with a financial risk lens.
The final one is around trying to find opportunity. Every organization needs to position itself for a low-carbon economy. We’re very much focused in this industry on downside risk and risk transfer. It’s all around protecting the balance sheet, but for climate it’s also around identifying and exploiting opportunities.
Ciara Jackson, EMEA food, agribusiness and beverage industry vertical leader, Aon: We spend a lot of our time thinking about emerging risks and how we can help our clients solve those risks. This industry is challenged with lots of competing pressures, including the need to scale food production in a climate-positive and sustainably way, in order to feed the world, given that the world’s population is forecast to be 10 billion by 2050.
There is a need to accelerate and de-risk the climate transition, with increasing pressure coming from regulators, consumers and capital-providers. The start of the value chain is very fragmented, with one third of the world’s global food coming from small farmers. There are huge stakeholder investor pressures around this industry. And climate is very much at the top of the agenda when we’re talking to our clients in this space. If you think about the impact of all of this, it’s so interconnected. It’s about food security, it’s about supply chain, it’s about inflation, it’s about human and economic sustainability.
Bridget Gainer, global head of public affairs and policy, Aon: Our mission is to help clients transition to a world that is more resilient, low carbon and nature positive. To that challenge, we bring our superpower, which is how we match capital with risk, leverage innovation, and bring data, analytics and advice to help make this transition happen. We do that by building an incredible team.
We’re also doing it by building out an ecosystem of partnerships with the most diverse thinkers around the world — agriculture scientists, land-use scientists, AI, satellite scientists and universities around the world where we are building not just models and some of the things we’re used to doing but leveraging the support for the new technologies and ideas that are going to take us to the climate transition.
Bridget Gainer: In addition to things like going to the UN Climate Conference, having a voice for our industry, engaging with the NGO community and engaging with the UN, we’re engaging with government not just as a regulator but as a client.
To the carrier community, this is really where our partnership is the most vital. We will not be able to go forward unless we can do so together. If you look at the Inflation Reduction Act that was passed in the U.S. a couple of months ago, it is an incredible catalyst of investment in new technology. And in many ways, I think we will look back and think of this as the new deal of our lifetime when it comes to climate. The amount of tax incentive funding that is coming in to incentivize investment in new technology is thrilling.
The carrier community and the capital that goes along on the insurance and reinsurance side is probably the linchpin to how we will go forward and innovate. And my hope is that we do that together.
William Bruce: I think most people I speak to are passionate about the climate. There is pressure from investors, stakeholders, employees, shareholders and others to transitions to a low-carbon economy to embrace net-zero pathways, and companies going to have to do this whether they like it or not.
Climate change is here to stay. There are going to be many more extreme weather events, which is always going to bring climate back to the public consciousness. Therefore, it’s going to be a political issue and it’s always going to remain at the forefront of the corporate agenda.
There are going to be a lot of greenwashing claims and climate change litigation coming down the track. I think that is certainly an area where the insurance industry can lean in.
Bridget Gainer: In addition to things like going to the UN Climate Conference, having a voice for our industry, engaging with the NGO community and engaging with the UN, we’re engaging with government not just as a regulator but as a client.
To the carrier community, this is really where our partnership is the most vital. We will not be able to go forward unless we can do so together. If you look at the Inflation Reduction Act that was passed in the U.S. a couple of months ago, it is an incredible catalyst of investment in new technology. And in many ways, I think we will look back and think of this as the new deal of our lifetime when it comes to climate. The amount of tax incentive funding that is coming in to incentivize investment in new technology is thrilling.
The carrier community and the capital that goes along on the insurance and reinsurance side is probably the linchpin to how we will go forward and innovate. And my hope is that we do that together.
William Bruce: I think most people I speak to are passionate about the climate. There is pressure from investors, stakeholders, employees, shareholders and others to transitions to a low-carbon economy to embrace net-zero pathways, and companies going to have to do this whether they like it or not.
Climate change is here to stay. There are going to be many more extreme weather events, which is always going to bring climate back to the public consciousness. Therefore, it’s going to be a political issue and it’s always going to remain at the forefront of the corporate agenda.
There are going to be a lot of greenwashing claims and climate change litigation coming down the track. I think that is certainly an area where the insurance industry can lean in.
Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.
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