COP27 Climate Conference

November 6-18, 2022
WTW attended UN COP27 Climate Conference, Sharm El-Sheikh, Egypt

WTW was a leading private sector player at the COP27 climate conference in Sharm El Sheikh, November 2022, with contribution across our people capital and risk expertise. Announcements included our $100m parametric insurance programme with UNICEF to protect 15 million children and families from cyclones; our appointment by the Government of Indonesia to advise on the national low carbon transition, the insurance of Hawaii’s coral reef systems and our role on leading climate risk modelling programmes.

WTW solutions provided examples for breakthroughs at this COP on Loss and Damage, Resilience, Financial Regulation, Transition Risk and Natural Asset Protection. In recognition of our leadership in this space, WTW was invited to become an inaugural private sector member of President Biden’s $3bn Emergency Plan for Climate Adaptation and Resilience (PREPARE) ‘Call to Action’ at a ceremony with USAID Administrator Samantha Power and NEC Director, Brian Deese.

COP is the UN’s flagship annual climate change forum, which sees convening countries debate and agree international efforts to mitigate and adapt to climate change. There is an increasing focus on the role of the private sector in driving the net zero, climate resilient transition and organisations operating in the climate space have a critical role to play in that journey.

Set against a turbulent geopolitical backdrop, including war in Ukraine, ongoing instability in the global economy, and stark warnings from climate science about the slow pace of progress to tackle climate change, there were four key themes outlined going into COP27: reducing emissions (mitigation), responding to climate risk (adaptation), funding (climate finance) and loss and damage. It was the latter theme that stole the headlines with the need for funding for loss and damage – impacts of climate change that cannot be adapted to – finally recognised by richer nations. Developing countries have pushed for acknowledgement for decades, arguing that having contributed least to the problem they are the ones most exposed to climate impacts. Approximately €340 million in pledges for loss and damage were made, including from Canada, New Zealand and the EU.

Our presence at COP27 was led by the Climate and Resilience Hub (CRH) and WTW Egypt. Full details of our on the ground engagement can be found below, as well all WTW announcements during the COP fortnight.

Announcements

WTW answers the U.S. President’s Call

WTW was invited to become an inaugural private sector member of U.S. President Biden’s Emergency Plan for Climate Adaptation and Resilience (PREPARE). This landmark $3 billion per year initiative led by USAID helps improve climate resilience across vulnerable developing countries with a focus on Climate Analytics, Health, Infrastructure, Water, Food and Agriculture and Financial Tools and Services. WTW was invited alongside Google, Mastercard, Microsoft and PepsiCo to join President Biden’s PREPARE ‘Call to Action’. USAID Administrator Samantha Power is co-leading the implementation of PREPARE with Special Presidential Envoy for Climate, John Kerry.

UNICEF / WTW $100m Parametric program to protect 15 million children and families from cyclone risk

WTW co-led the landmark launch of the world’s first child-focused parametric risk financing solution, the UNICEF “Today and Tomorrow” initiative. This ground-breaking program will invest in climate resilience and anticipatory action for improved cyclone preparedness for 15 million children and families in climate-vulnerable countries. It is complemented by a rapid response to tropical cyclones financed through a pre-arranged parametric insurance policy, designed by WTW and funded with support from the German and U.K. governments under the newly launched Global Shield against Climate Risks. The program is expected to provide at least $100 million of protection over an initial three-year period, focusing on Bangladesh, Comoros, Haiti, Fiji, Madagascar, Mozambique, Solomon Islands and Vanuatu.

“

UNICEF is the first UN institution, as well as one of the largest humanitarian organizations worldwide, to take out a bespoke disaster risk coverage for the protection of children.”

Simon Young | Senior Director, WTW

Helping Indonesia plan for a low-carbon transition

Coinciding with the G20 in Bali, WTW announced the launch of a new sovereign risk management program developed to help Indonesia plan and implement an orderly long-term low carbon transition. As the world’s largest thermal coal exporter, Indonesia is highly exposed to climate transition risks. The WTW Low Carbon Transition Project, funded by Agence Française de Développement, will work directly with Indonesia’s government to understand the impact a global climate transition will have on Indonesia’s finances and plan accordingly.

U.K. Transition Plan Taskforce launches Gold Standard

The Transition Plan Taskforce (TPT) published its new Disclosure Framework and accompanying guidance. The framework represents a real milestone in the TPT’s work and will provide the gold standard for best practice climate transition plans by private sector firms. The TPT is also establishing a “Sandbox” exercise for leading corporates and financial institutions to road test the framework.

Hurricane Lisa triggers first pay-out of Mesoamerican Reef Insurance Programme

WTW also announced the first ever pay-out by the Mesoamerican Reef (MAR) Insurance Program, under their innovative parametric policy, to finance immediate reef response in Belize, triggered on November 2, 2022 when the coast was hit by Hurricane Lisa. Developed by the MAR Fund and WTW, the ground-breaking program uses a pre-arranged, trigger-based financing approach to support rapid reef response following damaging hurricane events across the critically endangered 1,000km reef system.

As the fortnight of COP27 drew to a close, we announced the launch of the United States’ first ever coral reef insurance policy. The policy will provide money for rapid coral reef repair and restoration across Hawai‘i immediately following hurricane or tropical storm damage. It is triggered at windspeeds of 50 knots (57 mph) if sufficiently close to reefs and provides pay-outs up to $2 million within days to allow rapid reef repair and restoration after storm damage.