Investor Network On Climate Risk (INCR): Seizing the Opportunities in Climate Change

Ceres—Ceres Investor Network On Climate Risk (INCR) describes some the new profit centers emerging for insurers within the context of Climate Risk Mitigation. These progressive efforts address minimizing loss from future catastrophes.

“Insurer-initiated hurricane loss prevention methods employed at nearly 500 locations by insurer FM Global, which avoided an estimated $500 million in property losses from Hurricane Katrina in 2005, after customer investments of only $2.5 million. According to FM Global, its customers sustained eight times less property damage than those choosing not to implement the hurricane loss prevention recommendations, and the $500 million savings helped make the company profitable in a year when few insurers were.

Fireman’s Fund Insurance launching first-of-its-kind ‘green’ coverage, which includes premium credits for owners of loss-resistant green buildings, as well as options for building upgrades to the popular LEED (Leadership in Energy and Environmental Design) standards following a loss.

Carbon emission credit guarantees and other new renewable energy-related insurance products from Marsh, the world’s largest insurance broker, and AIG, the world’s largest insurer, and other insurers, which are allowing more companies and investors to participate in carbon-offset projects and burgeoning carbon emission trading markets.”

The INCR is a network with 70 investors with $7 trillion in assets for the purpose of managing risks and capturing the opportunities inherent in Climate Change.

The Key Components of the INCR Action Plan are:

• “Request corporate disclosure of financial risks from climate change
• Require investment managers to assess climate risk in portfolio
• Factor carbon costs into valuations & investment analysis
• Invest in low-carbon tech
• Improve energy performance of real estate portfolios & investments
• Support call for government action on climate policy and energy efficiency”

Source: http://www.incr.com/Page.aspx?pid=220 (Reliability: 7 )