Throughout 2023, the news was filled with weather related headlines. There were more than 200 days of new daily global temperature records set for the time of year. In December alone, we saw four named winter storms, Elin, Fergus, Gerrit and Henk, the River Trent burst its banks and the National Audit Office reported that the British Government is underprepared for extreme weather events that could cause significant disruption. If ever there was a time to sit up a take notice that the climate has changed, it’s now.
How does that impact us as insurance advisers? Well, think about this fact: breaching the 4C global warming threshold will make our world “uninsurable”.*
SMEs contribute to 63% of the UK business emissions and will play a critical role in the country’s road to net zero. 65% believe that sustainability factors are important or extremely important yet 90% feel restrained by obstacles such as cash flow and finding the right solutions.*
What can we, as insurance advisers, do about it? It seems like an insurmountable task. What can I do in my small corner of the UK to impact the monolithic challenge that is climate change? How can I make a difference?
The old adage, “Every little bit helps” springs to mind.
Most businesses are likely to be deterred by the idea of trying to crunch their carbon footprint numbers and understand their emissions metrics, when in reality the quick wins that can make a difference are right in front of us. We can take action today.
The facts are businesses that don’t start to focus their efforts on sustainability are going to be at a disadvantage – and soon.
Attracting talent
You don’t need me to point out that the war for talent is hot, and getting hotter. Prospective employees today are not only comparing remuneration and benefits, but are laser focused on the culture of the organisation and the principles for which it stands. Without a clear and meaningful purpose, backed up with a sound sustainability strategy, you could be last on their list, meaning that you won’t be attracting the best and the brightest into your organisations – leading to a distinct competitive disadvantage.
Responding to client needs
Clients, driven by savvy and sustainability conscious consumers, are increasingly scrutinising their supply chain. Procurement criteria, more often than not, require us to evidence steps taken to fulfil specific sustainability criteria. Without a clear sustainability statement in place, you could find yourselves missing out on lucrative and prestigious pitches and tenders, that could ultimately impact your bottom line. Referrals and recommendations to other competitors could result.
Anticipating future regulation
There is little doubt that the regulator will be looking at sustainability and carbon emissions sooner rather than later, so it makes sense that we collectively start to think about what we can do now, rather than be forced, kicking and screaming, into action through costly fines and penalties in the future.
Building resilience
The business world is changing. The norms of the past are no longer sustainable. Collectively, we must make conscious decisions to implement practices that will have a positive impact on our people, our clients, the communities in which we operate, and the world we inhabit. Doing so will help to position us to continue to build resilient businesses that can withstand the multiple challenges facing organisations today.
We are an industry of technicians. We like to get into the granular detail – and with good reason. However, when it comes to the climate crisis that is facing us, we all need to take action now. Just get started. Take the first step, set out a strategy, engage your people, identify some no regret decisions that will help get you started and deliver what you aim to achieve. As insurance advisers, let us be a model for our clients…now!
*Aviva Key Partner Conference 2023
