Nearly 8-in-10 Executives Believe World Is at ‘Climate Change Tipping Point’

January 20, 2022 by

Two-thirds of executives say their companies are “very concerned” about climate change, and 79% believe the world is at “a climate change tipping point,” according to the recently released Deloitte 2022 CxO Sustainability Report.

Deloitte polled more than 2,000 C-suite executives across 21 countries to gauge business

concerns and actions when it comes to climate change and environmental sustainability.

The “tipping point” sentiment was up markedly from 2021, when 59% of executives polled agreed with that assessment.

The poll shows that 97% of companies have already felt negative impacts of climate change. The nation’s where the greatest operational impacts were reported were: Australia, China, Japan, U.K., U.S., and Canada.

Respondents were asked to what degree they expect climate change to impact their company’s strategy and operations over the next three years: 4% answered “Little/no,” 34% answered “Moderate/some,” and 62% answered “Very high/high.”

It wasn’t all negative. Most (88%) polled believe that with immediate action, the worst impacts of climate change can be limited, up from 63% previously.

And it appears the majority of respondents say their companies are taking action: 67% say they are using more sustainable materials; 66% say they are increasing the efficiency of energy use; 57% are using energy-efficient or climate friendly machinery, technologies, and equipment.

Brazil Drilling

Global insurers Chubb, MAPFRE, and Tokio Marine insure the majority of Brazil’s offshore oil and gas drilling, according to a report from activists.

The report, Fueling Climate Change: The Insurers Behind Brazil’s Offshore Oil Expansion, from Insure Our Future, a network of non-govermental organizations and social movements that attempt to hold the insurance industry accountable for its role in the climate crisis, is reportedly based on previously undisclosed documents.

Insurance Journal International Editor Lisa Howard is working on a more extensive article on this matter, so stay tuned for an update to this column with a link to her reporting in coming days.

The report finds these three companies insure Brazil’s national oil company Petrobras, which extracts nearly 93% of all Brazil’s oil and gas. Chubb and Tokio Marine, along with AXA, Liberty Mutual, Fairfax, Argo, and several Brazilian insurers, also insure exploratory oil and gas operations by international companies, the report alleges.

Brazil has said it plans to expand offshore oil and gas operations.

Scientists and the United Nations have called for decreasing oil and gas production by 4% and 3% respectively every year.

Elana Sulakshana, Senior Energy Finance Campaigner at Rainforest Action Network, called out Chubb CEO Evan Greenberg, and said that “any company that claims to care about the climate, biodiversity, and human rights cannot insure exploration and expansion of Brazil’s offshore oil reserves.

The report notes that much of the country’s offshore oil reserves are in fragile ecosystems like the Great Amazon Reef.

Petrobras, which is insured by Chubb, MAPFRE, and Tokio Marine, owns numerous concessions in the still-untouched area near the reef.

Net-Zero

A group of the world’s biggest insurers and reinsurers jointly pledging to eliminate greenhouse gas emissions from their underwriting activities have run into an unexpected opponent of their planet-friendly mission, according to a Bloomberg article on Insurance Journal this week.

The Net-Zero Insurance Alliance, whose members include AXA SA, Allianz SE and Swiss Re AG, has purposely limited the scope of its collaboration to avoid potential violations of antitrust rules, people familiar with the matter, who asked not to be identified discussing non-public information, told Bloomberg.

A proposal to include a commitment to exit coal insurance as part of the terms of group membership was scrapped following advice from attorneys at Norton Rose Fulbright, one of the people said.

Antitrust rules that exist to protect consumers from monopolies are at odds with a world where cutting emissions is a top priority, and until the rules are changed, they serve as a potential impediment to climate action, the article notes.

Members of the alliance have committed reaching net-zero emissions from their insurance and reinsurance underwriting portfolios by 2050.

The insurance coalition is part of the larger Glasgow Financial Alliance for Net Zero, which includes 450-plus companies with more than $130 trillion of assets committing to zero net financed emissions.

Attorneys at law firm Norton Rose Fulbright advised the insurance group that its members might be liable to anti-competition litigation if they act together against specific industries, the people told Bloomberg.

Colorado Wildfires

Colorado is seeking to expand building codes as climate change increases the risk of wildfires.

There are new calls for stronger building codes in Colorado after devastating suburban wildfires, including the early January Colorado wildfire that caused at least $513 million in damage and destroyed nearly 1,100 homes and structures, in which officials say is the most destructive wildfire in state history.

A National Public Radio report covers the developments in a broadcast, including a recent change in which the National Fire Protection Association is now pushing for states like Colorado to adopt at least minimum statewide building codes. Michele Steinberg, the wildfire division director, told NPR more homes are burning down today than they were 30 years ago.

“And we know that wildfires and their increasing frequency, intensity, the fire service can’t do this alone,” she said. “Volunteer activity can’t do this alone. We were missing the government responsibility, the enforcers, the codes and standards.”

In another matter, the Biden administration on Tuesday unveiled a 10-year plan to treat and maintain millions of additional acres of forests in the western United States to reduce the severity of seasonal wildfires.

Past columns:

Popular Today