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Sage Partners

Thoughts for 2020


Regardless if you believe in climate change or not, this isn't really the issue. Common sense says we simply cannot continue to keep using the world as we have done, depleting it of resources, destroying habitats & killing off species faster than Trump re applies fake tan. The question is how can we encourage people to change their behaviour, in order that we can ensure the world remains a very comfortable place for all things, and a place that will endure for millennia to come. This is the challenge for the UN.

While [some] world leaders are only interested in themselves [what do they care after they are gone .... many of who have only a relatively short number of years left anyway] ... the business world has been gathering momentum to take the initiative - either for altruistic or financial reward - and do their part to mitigate the damage & wastage their business may be causing. For a long time, the insurance industry has be slow [apathetic & negligent really] to recognise the potential scale of hurt they may be about to face. This hurt can come in various forms; 1. Not presenting their own business as 'climate friendly' and suffering the wrath through consumer choice 2. Not considering the latent threats climate risks pose to their underwriting models [think liability exposures for high Co2 emitters, or underwriters of property in low lying areas or areas prone to extreme weather events] 3. Shareholder disapproval when balance sheets finally begin to reflect these contingent liabilities and wipes $,000,000 in share value [remember asbestos!] 4. Personal liability attaching to directors of companies, who like when it comes to health and safety considerations, fail to take steps to mitigate threats posed to, or by, the business they represent.

Expect to start seeing prudent insurers take positions around climate exposures. We've already started to see some decline to accept risks in certain regions. I've little doubt this will expand to businesses involved in certain non-environmentally acceptable activities, or where the business cannot demonstrate a very clear environmental policy. 

It's not all bad. But like cyber/health & safety/fraud and numerous other considerations businesses review every week or month, climate will need to become a subject for every company to take seriously. 

I recommend you start 

Geoff Manks