Australia’s ICA launches insurer roadmap to net zero

Australia’s insurance council has launched a roadmap outlining how insurers can achieve net zero emissions for their operations by 2030 and across the entirety of their activities by 2050.

The  Insurance Council of Australia (ICA) has released a paper ‘Towards a Net Zero and Resilient Future’, authored by Boston Consulting Group for the Insurance Council, following an “extensive consultation” with the $60 billion general insurance sector over the last 12 months.

The roadmap charts a path for insurers to achieve net-zero by 2030 for their own operations through measures such as investing in energy efficiency, rooftop solar for office buildings, and transitioning corporate fleets to electric.

It also outlines a pathway for insurers to undertake the more difficult task of reducing emissions associated with underwriting activities, the claims supply chain, and investments, achieving net zero no later than 2050.

Insurers are on the frontline of extreme weather impacts and have been strongly advocating for improved measures and investments to better protect against extreme weather risk.

The ICA believes implementation of the new roadmap “will place insurers at the vanguard of the financial services sector when it comes to acting on the cause – not just the impacts – of worsening extreme weather.”

A number of insurers are already aligned with the roadmap, while others will use the report to chart the operational and strategic changes required to meet its aims, the council claimed.

Andrew Hall, CEO Insurance Council of Australia, said: “As a financial service focused on risk, insurance is already bearing the cost of worsening extreme weather driven by climate change. Insurance customers around the country are facing a new era of extreme weather, from more intense rainfall and flooding, more severe bushfires, and projections of more intense cyclones. The total cost of these extreme weather events is forecast to be unlike anything we have experienced, with climate-related extreme weather events expected to cost $39.3 billion a year by 2050.

“Insurance is a foundational component of the Australian economy with billions of dollars invested in industries globally, and coverage of millions of Australian homes, businesses and assets. This roadmap will play a critical role in enabling our industry to do our part in reducing emissions and achieving the goals of a net zero economy.”

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