With COP28 heading to the city in November, this year’s DWIC opened with a rallying cry for the industry to focus on the climate
With COP28 heading to the city in November, this year’s Dubai World Insurance Congress (DWIC) opened with a rallying cry for the industry to focus on the climate.
Over 1,000 delegates from 61 countries have gathering in Dubai for the start of the 6th annual DWIC today, with climate change and sustainability early conference themes.
Opening addresses were given by Alya Al Zarouni, Chief Operating Officer of Dubai International Financial Centre (DIFC), Dame Susan Rice, Chair of the GEFI Global Steering Group, and Jerome Jean Haegeli, Group Chief Economist of the Swiss Re Institute.
With a focus on Dubai ahead of COP28 later this year, delegates were told in the opening addresses that the insurance industry must “be part of the climate conversation”.
“Climate, and sustainability more generally, are now becoming a core part of how organisations work and how their people make decisions,” said Dame Rice.
“Insurers are financially on the frontline of climate risks. As such, they have a strong desire to improve climate resilience, both to aid business and from a societal point of view.”
The speaker stated that despite this focus, the elements of climate change which can be covered by insurance is an issue which means that many communities are still physically and economically vulnerable to the impacts of climate change.
“We witnessed this in Pakistan during last year’s devastating floods. This was a humanitarian catastrophe with $50 billion of damage, of which only $100 million was insured.”
While the insurance industry should be focused on the climate, it must be meaningful action, not just ‘green-washing’, where corporate spin misleads the public into believing a company’s offerings are environmentally friendly.
“The industry faces the very real risks of green-washing. This is a very serious issue. Unless the industry comes together to combat false, inflated or misleading claims, we risk losing trust and we cannot afford that as an industry,” Dame Rice.
“We need to make sure that the labels we give our products can stand up to challenge and be understood. Many in the industry might not even know they are green-washing, so we must come together as an industry to stop it.”
Getting the culture right
Delegates heard that a vital part of battling climate change and acting sustainably is having the right organisational culture.
“Culture is sometimes defined as how we behave when no one is looking, but that is not right,” she continued. ”Culture is about how we behave when everyone is looking.
“Culture reflects what is admired and that is what guides our actions in our organisations. When we consider climate and sustainability, we cannot afford to appear to be achieving our strategy and not actually doing so.”
The speaker said that culture can be difficult for an organisation to measure, but there are aspects you can measure which assess the culture of an organisation. This has led to data analytics and behavioural science now being used to assess the culture of financial institutions in novel ways.
Economic impacts of climate change
Discussing the economic implications of climate change for the industry, Haegeli highlighted the consequences of inaction.
“Global economic activity could be up to 10% lower by mid-century if global warming stays on its current trajectory, rather than adhering to the Paris Protocol,” he said.
“For this region, climate change is effecting the Middle East more severely and no action is not an option. The region has begun to act on mitigating climate risks and that must continue.”
He added that such aims must be achieved in the context on rising inflation and interest rates, debt, and geopolitical tensions including the war in Ukraine.
“We can expect more tightening to come and the possibility of a mild recession in the US. However, there is some reason for optimism and the possibility of a soft landing economically has increased,” the speaker added.