Airmic’s CEO Julia Graham has called on risk managers, brokers and insurers to pledge to work together to tackle climate change risk.
The move came as a new Airmic survey found that more than 40% of members believe climate change will have a material impact on their organisations within one or two years. The survey also shows that regulatory compliance with ESG risks is the leading concern for members this year.
Speaking on the opening day of Airmic’s conference, Ms Graham said risk managers cannot deal with some of these climate issues on their own, and urged the risk transfer industry to join forces and work towards solutions.
“I don’t want to pour cold water on this conference but risk is our game. So let’s all pledge to commit to working together to make a difference. I think we can,” said Graham.
“None of our member organisations are big enough on their own and the risk and insurance industry collectively needs to work together. We have an amazing opportunity as insurers, brokers and clients to work together to make a difference. And there really is an opportunity to do that. So my pledge to the industry is heartfelt and something that we will pick up and develop next year,” she added.
Graham said Airmic has been invited by the CBI to attend COP26 next month to look, listen, network and learn. This will help the risk and insurance community respond to climate issues, she added.
Airmic’s member survey shows that 40% of risk professionals feel their organisation is ready for Task Force on Climate-related Financial Disclosures (TCFD), which will begin applying to some UK firms this year and to all companies by 2025. Some 33% of survey respondents say they are working towards TCFD and 18% say they don’t apply to their organisation.
However, seperate research by Marsh suggests that only 30% of FTSE 100 companies currently disclose climate change risk in line with TCFD. This is based on data from 2020 and 2021.
Of the 100 largest listed UK companies, Marsh says it found vast differences between sectors. The utility sector led the way, with 100% of firms reporting climate change risk in line with the TCFD recommendations. It is followed by mining companies with 75% compliance and half of companies in the food and beverages sector.
At the other end of the scale, Marsh says not a single company in the support services sector recorded evidence of meeting TCFD’s recommendations.
Meanwhile, four sectors – media, travel and leisure, aerospace and industrial, and electronics and technology – reported 17% of firms in line with TCFD practices. Some 29% of financial companies disclosed climate change risks in line with TCFD.
Marsh says the TCFD’s framework has “gained significant traction” recently and the forthcoming COP26 UN climate change summit could pass agreement on its recommendations.
David Stark, consulting director and practice leader of enterprise risk services at Marsh, said climate reporting is rising in prominence, but the survey shows that a minority of FTSE 100 firms are currently reporting TCFD separately.
“I think increasingly there will be the need for a standalone TCFD report for many organisations,” he said during Airmic’s press conference.