Magazine article Risk Management

Environmental Issues: A Growing Concern

Magazine article Risk Management

Environmental Issues: A Growing Concern

Article excerpt

Global warming is just one of the issues heating up and making businesses realize the potential effects of a deteriorating environment. The independent Intergovernmental Panel on Climate Change (IPCC), an international group of 2,500 climate scientists assembled under the authority of the United Nations to monitor the global climate, has confirmed that if fossil fuel emissions continue at anywhere near current levels, the planet will warm up. dangerously and could well experience a devastating increase in the frequency of natural disasters. According to Dr. Jeremy Leggett, director of Greenpeace International's Solar Initiative, financial industries are waking up to this threat. "Believing that a healthy environment and a strong economy go hand in hand, Greenpeace has forged links with major insurance and reinsurance companies, banks and investment firms throughout the world," he said. Together, they are "calling on governments to take stronger measures now to cut the release of [CO.sub.2] into the atmosphere," he added.

In March 1995, the world's first global warming conference for insurers, bankers and others from the financial services industry convened at the Congress Centre in Berlin. Concerned about his company's financial exposures, Roll Gerling, chairman of the supervisory board of the Gerling Group of Insurance Companies, the largest insurance company in Germany, has paid for the production of Climate Change and the Financial Sector, a book comprising the presentations and discussions from this conference, and has funded a series of seminars based on its ideas.

Summing up the rationale for this concern, Carlos Joly, senior vice president at UNI Storebrand of Norway, wrote, "What does it do us to cash in investments 20 years from now if the world goes to hell partly as a result of what we invest in?".

Environmental and Business-Friendly Products

Insurers and bankers are creating financial and insurance products designed to protect against environmental risk and to profit from the movement's technological advancements.

For instance, environmental consultants are combining forces with diverse businesses. Commerce & Industry Insurance Company (C&I), a subsidiary of American International Group, Inc. …

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