New tool will assess companies’ transition plans to a low-carbon economy and ensure firms can continue to access insurance
Willis Towers Watson has launched an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying which organisations have robust transition plans aligned to the Paris Agreement, and supports their role as stewards in the transition to a low-carbon economy.
The broking giant is working with independent third-party groups including consultancy Volans and the Climate Bonds Initiative (CBI) on the Climate Transition Pathways (CTP) programme.
Organisations meeting CTP principals and achieving accreditation will have the opportunity to access insurance capacity and capital to support their orderly transition and help them meet their low-carbon commitments.
Mark Carney, UN special envoy for Climate Action and Finance, called it “a valuable contribution to this process to ensure that every professional financial decision takes climate change into account.”
He added: “To achieve net zero, we need a whole economy transition - every company, bank, insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them.
“As insurers take steps to align their underwriting activities with the transition, companies will increasingly need to display that they have the right plans or risk losing access to insurance.
Rowan Douglas, head of the Climate and Resilience Hub at Willis Towers Watson said, “To ensure that organisations in high-carbon industries transition effectively, in line with what the science indicates is needed, they require robust transition plans and the ability to execute successfully against these.
“By incubating CTP, we are helping lead the industry in ensuring these organisations are supported through an orderly transition and can continue to access insurance and benefit from a greater level of certainty around the future availability of risk capacity, helping them deliver a more sustainable future.”
Sean Kidney, CEO, CBI said “Our climate and environmental challenges are extraordinary. Responding to those, and to consumer and regulatory pressure, all businesses are reviewing their sustainable credentials. They need tools to help them do so.”