As the build up to COP26 continues Willis Towers Watson has announced it is working with a range of other organisations to launch of an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identifying which organisations have robust transition plans aligned to the Paris Agreement, and supports their role as stewards in the transition to a low-carbon economy.
The launch of the Climate Transition Pathways (CTP) has seen WTW work with a range of independent third-party groups including Volans, a consultancy responsible for the Bankers for Net Zero initiative, and the Climate Bonds Initiative (CBI), a global investment organization committed to climate resilience, to create the CTP governance committee.
It comes as former Bank of England Governor, now UN Special Envoy for Climate Action and Finance and the Prime Minister’s Finance Adviser for COP26, Mark Carney (pic) has called for the insurance sector to highlight what they are planning for a net zero future.
“To achieve net zero we need a whole economy transition – every company, bank, insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them,” he explained. “As insurers take steps to align their underwriting activities with the transition, companies will increasingly need to display that they have the right plans or risk losing access to insurance. Willis Towers Watson’s work to develop tools to assess companies’ transition plans is a valuable contribution to this process to ensure that every professional financial decision takes climate change into account.”
WTW said the committee members will be responsible for creating industry-specific solutions to be rolled-out over the coming months.
“They will utilise the Assessment for Low Carbon Transition (ACT) methodology and map the output to a robust accreditation model to review business commitments to principles aligned to the Paris Agreement and science-based targets consistent with reducing global emissions to help companies move to a net-zero carbon environment,” it added.
Organisations meeting these principals and achieving accreditation will have the opportunity to access insurance capacity and capital to support their orderly transition and help them meet their low-carbon commitments.
Rowan Douglas, Head of the Climate and Resilience Hub at Willis Towers Watson said, “To ensure that organisations in high-carbon industries transition effectively, in line with what the science indicates is needed, they require robust transition plans and the ability to execute successfully against these. By incubating Climate Transition Pathways (CTP), we are helping lead the industry in ensuring these organisations are supported through an orderly transition and can continue to access insurance and benefit from a greater level of certainty around the future availability of risk capacity, helping them deliver a more sustainable future.”
The scheme has been supported by UK industry leaders with CBI CEO, Sean Kidney, saying it was keen to play a full role in tackling what he warned was a serious threat to every aspect of life.
“Our climate and environmental challenges are extraordinary,” he added. “Responding to those, and to consumer and regulatory pressure, all businesses are reviewing their sustainable credentials. They need tools to help them do so. We are delighted to be collaborating with Willis Towers Watson and be part of the Governance Committee which will pioneer Climate Transition Pathways and provide a standard which will help businesses move to a more sustainable future.”