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Prince Charles Partners with Global Insurance Industry to Drive Substantive Climate Action

The SMI Insurance Task Force commits to provide climate-positive financing and risk-management solutions to support and encourage individuals and businesses around the world to accelerate their transition to a sustainable future.

Published 3 years ago | About a 4 minute read

Image: Denniz Futalan/Pexels

On Thursday, HRH The Prince of Wales and Lloyd's of London — the world’s leading insurance and reinsurance marketplace — launched the Prince’s Sustainable Markets Initiative (SMI) Insurance Task Force. The Task Force, convened by HRH and chaired by Lloyd’s, is comprised of CEOs from 17 of the world’s largest insurance and reinsurance companies, providing an influential platform for the sector to collectively advance the world’s progress towards a resilient, net-zero economy.

Through its many decades of providing support to communities, businesses and economies in the face of increasingly severe and frequent weather events, the global insurance industry has a unique view of the climate crisis and a critical role to play. Alongside mitigating and managing the impact of these climate change-fueled disasters, the industry continues to provide financial support across multiple industries to build greater climate resilience, supporting the increased scale and speed of the transition.

The SMI Insurance Task Force’s Statement of Intent commits to provide climate-positive financing and risk-management solutions to support and encourage individuals and businesses around the world to accelerate their transition to a sustainable future.

Lloyd’s says the launch of the Task Force marks a new and significant global insurance industry commitment to drive climate-positive action at pace through a number of key initiatives, including:

Driving insurance product and services innovation to empower commercial customers to develop, invest in and scale their sustainability initiatives — supporting innovation across multiple sectors and geographies. The Task Force will launch at least two new insurance products to protect priority energy industries — such as nuclear energy, hydrogen and offshore wind — against an evolving risk landscape, in order to enable their accelerated growth.
Implementing sustainable processes across the insurance supply chain to encourage and incentivize individuals to take positive actions to live more sustainably. This will include launching an industry-wide framework to drive sustainable outcomes for customers — for example, through introducing “build back better” claims clauses in home insurance policies to encourage customers to rebuild damaged properties with more sustainable materials in support of a net-zero transition.
Establishing a public-private disaster resilience, response and recovery framework to help protect developing nations from the evolving economic and societal impacts of climate change. The framework will leverage the insurance industry’s unique ability to combine an insurance product with risk-management and loss-recovery services, in order to increase preparedness for and limit the impacts of these events. Once developed, this solution will be rolled out across vulnerable countries to support better disaster response and recovery, with a pilot being initiated in 2021.
Developing a framework for accelerating and scaling sustainable investment to help unlock the global (re)insurance industry’s more than $30tn in assets under management, increasingly directing capital towards investments that drive climate-positive outcomes in both developed and developing nations. A public-private investment proposal will be developed, with a particular focus on renewable energy and climate transition assets to enable the transition towards a low-carbon economy.

A year after the launch of the SMI at the World Economic Forum in Davos in 2020, Prince Charles — a lifelong environmentalist and heir to the British throne — launched an initiative called the Terra Carta to urge big business, industry and the financial worlds to commit to a COVID-recovery plan that "works in harmony with Nature's own economy, rather than against it” — with nearly 100 actions to become sustainable by 2030. The SMI Task Force will build and execute on these ideas.

“The insurance industry is exceptionally well placed to understand the impact of climate change and the damage it can cause to us all if we don’t take action now,” His Royal Highness, The Prince of Wales said. “This is why I am so pleased that a large number of the world’s leading insurance companies have joined together to identify how the insurance industry can help put nature, people and the planet at the heart of our entire economy.”

Lloyd’s Chairman Bruce Carnegie-Brown added: “As the world begins to recover from a pandemic that has caused significant and far-reaching financial and societal challenges, it does so with an opportunity to build back with sustainability as a foundation and guiding principle. Although climate change poses unprecedented systemic risk, it is one which — through partnership and accelerated action — we have the means to address. As a task force, we are making a resolute commitment to be a catalyst for action to help create a more sustainable future through the risks we manage and the capital we invest.”

Learn more about the SMI Task Force and participating insurers here.