Nature loss is exposing homes and businesses that insurers protect to a wide range of risks, such as flooding.
The Association of British Insurers today launches guidance to help insurers and long-term savings providers become ‘nature positive’ in helping tackle the decline in the UK’s nature. The guidance is launched at our third annual Climate Change summit, where progress among ABI members to reaching Net Zero will be assessed.
Nature, which includes all living matter (biodiversity), together with geology, water, climate and all other inanimate components that make up our planet, is in serious decline. For example, there has been a 70% drop in global wildlife populations since 1970; in the UK, a quarter of mammals are at risk of extinction, with 84% of rivers in poor ecological health. The UK ranks in the bottom 10% of countries for biodiversity.
Drivers for this worrying loss include climate change, changes in land use, pollution and invasive species, such as Japanese knotweed.
Compelling reasons for action.
A guide to action on nature sets out the compelling case for action by the industry, including:
- Nature loss exposes the homes and businesses that ABI members protect across the UK to a wide range of risks, which in turn will impact markets and financial performance.
- Some studies have estimated that half of global Gross Domestic Product – US $44 trillion – is highly to moderately dependent on nature.
- Impact on people’s health. There is a clear link between physical and mental health and healthy ecosystems. This impacts on the business models of long-term savings providers, life and health insurers.
- Consumer pressure. There is a clear reputation risk to firms not seen to be addressing nature loss. For example, 94% of residents polled by the Local Government Association in 2021 wanted more local biodiversity.
- Net zero cannot be achieved with innovation and new technologies alone. We need nature to absorb carbon from the atmosphere and provide resilience. So, carbon credits and offsets must inevitably incorporate nature.
Steps firms can take.
Our guide will help firms begin to assess the risks and opportunities, so developing a strategy for action. This will include:
- Identifying external organisations, tools and best practice examples for expertise and guidance
- Developing a heatmap as an initial estimation of possible impacts and identifying focus areas.
- Learn from best practice form ‘early movers’ in the sector.
- Setting up internal working groups within firms, leading the agreement of guiding principles, including governance and accountability.
We will support our members, through collaboration and sharing best practice, consumer advice on ‘nature positive’ behaviours, and how the sector’s fraud tackling expertise can help address environmental crime, like illegal deforestation.
The Guide also calls for government to provide a strong lead to place nature and the centre of climate adaptation, which will help firms plan their strategies.
Hannah Gurga, the ABI’s Director General, said:
“Nature loss is one of the most crucial issues facing our planet. It's shocking decline not only threatens life but will harm businesses and prevent economic growth.
“Yet many businesses have not found it easy to assess their reliance on nature, or to recognise its importance to their business strategies. Our guide will enable our members to better understand this issue, the risks and opportunities it poses to them and their customers, so that they are truly ‘nature positive’.”
At our climate change summit, we will review progress on our Climate Change Roadmap, at the halfway point between launching this work in 2021 and the deadline for the first set of milestones in 2025.
Our annual update on the Roadmap includes updates from our members, showing the progress we have made, with 84% already having set targets and begun developing transition plans, in advance of this becoming mandatory. We are confident that the majority of our members remain on track to meet the 2025 milestones, but we also recognise that this momentum must not halt if we are to do so.
For more information please contact the Press Office.