29/06/2005 – The financial
industry needs to systematically screen climate
change risks, according to a new report by
the Allianz Group and WWF, which outlines
specific steps for actions to better integrate
risks from climate change into the insurance,
banking, and asset management sectors.
Allianz, an international financial services
provider, marked the publication of the report
– Climate Change & the Financial Sector:
An Agenda for Action – with a pledge to increase
investments in renewable energies by 300 to
500 million euros over the next five years.
"Climate change creates significant
costs for the financial industry,” said Dr
Joachim Faber, Allianz AG Board Member and
CEO of Allianz's asset management arm, Allianz
Global Investors.
"In the interest of our clients and
shareholders we are obligated to take these
risks into account when making decisions on
insurance underwriting, investments, or lending
credit.”
To tackle climate change risks more strategically,
Allianz will address the issue at the board
level and examine carbon risks in banking,
asset management, and insurance.
"The financial industry plays a pivotal
role in helping to mitigate the effects of
climate change and steer the world towards
clean energy," said Robert Napier, Chief
Executive of WWF UK.
"WWF and Allianz want to cooperate further
to develop new tools for climate risk assessment,
and show how leading financial companies can
help manage the transition to a clean energy
economy."
Allianz has commissioned a "Climate
Core Group" headed by Otto Steinmetz,
Chief Risk Officer of Dresdner Bank. The banking
arm of Allianz Group and its investment bank
Dresdner Kleinwort Wasserstein are frontrunners
in climate related business areas such as
emissions trading.
Allianz as an insurance provider expects
that insurance premiums may rise to cover
the risks associated with climate change.
“We agree with scientists who say that while
natural catastrophes can not be conclusively
linked to climate change, the severity and
frequency of natural disasters have increased
as a result of a changing climate,” said Andrew
Torrance, CEO of Allianz Cornhill, the UK-based
insurance subsidiary.
"For our insurance business, climate
change is increasing the potential of property
damage at a rate of 2 to 4 percent per year.
In some cases this might result in property
damage premium rises in some markets as insurers
adjust their risk-based insurance cost models
to reflect the increasing severity of climate
change events.”
Addressing world leaders who are attending
the G8 summit in Scotland next week, Allianz
and WWF call for a clearer policy framework
to adjust long-term investments and credit
lending for banks and investors accordingly.
“As an investor we need greater political
and regulatory security, therefore we need
a clear policy framework on climate change
especially with regard to the post-2012 Emission
Trading Scheme allocations,” said Joachim
Faber.
“Businesses need to play their part but they
rely on a stable and clear political direction,"
added Robert Napier.
"The G8 leaders must come up with a
clear plan of action to combat dangerous climate
change. They must ensure that the G8 sends
a clear signal that emissions will be cut
and carbon markets will continue long into
the future."
