When I think about the desirable outcomes from COP26 in Glasgow, I tend to put them in three buckets – the person on the street (including me); finance and insurance; and business and commerce in general.
My starting point is that the outcomes need to be assessed on what they do for humanity.
And what I would say to the COP26 delegates is – humanity is watching and looking for leadership. I believe the zeitgeist has shifted so that most people around the world understand that climate change is a problem that’s manifesting itself in real terms. Many, I believe also, would share my view that we’re in a dangerous place and that, while lots of big statements have been made and need to be made at COP26 or wherever, it’s the flesh on the bones of those statements and commitments that are crucial now.
What has been largely missing so far in my view is clarity for the average person on the street. Clarity, using open and plain language, enables them to understand the size of the issue and what they can do about it. Sure the science is important, but the guidance needs to be more geared to how it will affect normal people’s lives: what changes they’ll have to make.
Equally, it won’t be helpful if this is done in a finger-wagging, accusatory way. Collectively, those leading the charge need to clearly articulate the strong benefits we’ll see at the end of transition to a net zero world.
Leadership doesn’t only mean politicians and international bodies. The financial services and insurance sector has an important role to play. So I hope COP26 emphasizes financial services' and insurance organizations' power to drive transition. In our own small way, we at Willis Towers Watson like to think we’re championing this movement with initiatives such as the Coalition for Climate Resilient Investment, the Climate Transition Index for equities and Climate Transition Pathways.
“I’d like it reinforced that it’s okay to make money from effective climate transition.”
Nick Dunlop
Managing Director
The wider message coming from the conference ought to be that if you do certain things, banks, asset managers and insurers will continue to provide you with financing and risk capital. In support of that, the sector should be able to use the tools that are increasingly at its disposal to show that a climate aware approach is not only more sustainable, but also offers better longer-term financial prospects. Regulation, I believe, will eradicate any remaining “greenwashing” on the part of financial services and insurance providers, and there is a real opportunity to reinforce the sector’s role as stewards of positive transition.
What I would really like to see is the term “green finance” becoming redundant, so that it’s just accepted that more sustainable finance approaches are better.
For businesses in general, I would class most to one degree or another in an exploratory phase when it comes to climate impacts. Many are only too aware of the triple threat of pressures building on them: pressure from investors, pressure from regulators and, perhaps most importantly, pressure from customers. They’re weighing their options.
What I hope COP26 makes clear is that the only option is the sustainable, low carbon option. Key to that, as I see it, is to help them see the big opportunity in mitigating climate risks and improving resilience. Making money and being a low carbon business can in fact be perfectly aligned. Allied to that, I’d like it reinforced that it’s okay to make money from effective climate transition.
I know I’m maybe hoping for a lot, but a lot is what I think is needed – and quickly – if we’re to get on top of this situation of our own making.
