Voluntary business engagement in climate change: A study of the ClimateWise Principles

There is an expectation that the insurance sector should be leading business efforts in responding to climate change due to their inherent exposure to increasing risks. However, insurance companies normally operate on a one year time horizon - underwriting risks through policies which change each year to reflect new knowledge of these risks. The ClimateWise principles is a voluntary initiative of the insurance sector that was launched in 2007 to provide a basis for insurance companies to engage with climate change risks. This paper introduces the ClimateWise initiative and explores progress made since its launch. The paper presents new knowledge on whether this voluntary initiative provides a useful structure for the insurance sector in responding to the challenge of climate change. It finds that while the insurance sector has engaged with climate change, there is much more to do and we welcome the recent changes to ClimateWise that more accurately reflect this. The paper concludes that ClimateWise has been a useful initiative for the insurance companies and as a potential benchmark for the sector it offers some value. However, ClimateWise has not provided a strong enough engagement across the sector to embed climate action into business decisions