Sir James Bevan, Chief Executive at the Environment Agency,has urged the insurance industry to invest more to tackle the climate emergency, pointing out that “most of that potential investment will come from the private sector, which can marshal much bigger resources than any government.”

Speaking at the Association of British Insurers (ABI) this week, the EA chief said that the climate emergency had worsened since his speech to the ABI when he had warned that it was “the greatest threat to us and future generations.”

Referrring to last month’s warning by the Met Office that there was a 50:50 chance we would see a rise in the world’s temperature by more than 1.5C over the next five years, he told delegates:

“Those are not good odds. And according to the Intergovernmental Panel on Climate Change, even just temporarily exceeding this warming level will result in additional and severe impacts, some of which will be irreversible.”

The ABI conference was focused on three areas in particular:

• the need to move from data analysis to practical action
• the importance of evolving beyond emissions reduction to protecting ecosystems and biodiversity
• the alignment of climate action with social impact

Praising the insurance industry as a leader in the against climate emergency fight , Sir James told the conference it was “smart for the insurance industry to help tackle the climate emergency” because both insurers and their customers are increasingly feeling its impacts.

The EA Chief cited the following comment by Huw Evans, former ABI Director General:

“The biggest thing the industry can do is to use its sizeable investment portfolios to move funding away from things that are polluting the planet and into greener initiatives”.

However, more investment is needed across the board to make communities climate resilient, Sir James said, pointing out that “most of that potential investment will come from the private sector, which can marshal much bigger resources than any government.”

The Environment Agency is working with the government and other independent experts to develop standards for green investment – known as the Green Taxonomy - he told delegates. According to Sir James, the common framework will set the bar for investments that can be defined as environmentally sustainable – and will help businesses, investors and consumers make informed choices and support investment in sustainable projects.

It would also help clamp down on greenwashing – “false, unsubstantiated or exaggerated claims that an investment or business is environmentally friendly or carbon neutral or otherwise helping tackle the climate emergency.”, he added.

Mitigation and adaption

He went on to warn that tackle the climate emergency successfully mitigation alone is not enough and adaptation is also needed – which would also only be possible with investment, which “again will need to come from both private and public sources.”

He told delegates that the Agency had made a commitment to make the Environment Agency itself and its whole supply chain Net Zero by 2030. The EA was also using its own Pension Fund to generate strong financial returns by investing in companies that contribute to a sustainable economy.

Sir James told the ABI that investment now will pay massive dividends in the future, saying:

“ It is much better value to invest early in climate resilience than to live with the costs of inaction.”