The wraiths of climate change — floods, winds and fires — have finally hit a major pain nerve in our economic system.
The reaction is likely to trigger the kind of substantial reform that climate activists have been after for years. While protests have succeeded in spotlighting the environmental cause, this threat to corporate profits has finally penetrated the system.
This week protests went up a notch as tens of thousands of supporters of climate action filled the streets of New York City. The action was copied around the world. Their fury was heightened by revelations that EXXON had undermined organizations like the United Nations Intergovernmental Panel on Climate Change and cast doubt on its findings linking fossil fuels to climate change.
Now, however, there is a big threat to the EXXONs of this world: the climate cudgel is being taken up by a corporate sector of major significance — the insurance industry.
Profits in the insurance sector are threatened by huge losses due to climate change, and companies are hurriedly revising their coverage offerings for besieged areas. In some cases, no coverage will be available at all, leaving major centres high-and-dry for future investment and causing a stampede to less threatened zones.
They recognize that further changes in the global climate are already baked into the ecosystem for at least the next ten years, so their concerns have expanded beyond individual catastrophic events to focus on the longer interactions between the global climate and human systems.
A new BlackRock study shows that insurers representing US$27 trillion (yes, Trillion dollars) in assets are prioritising sustainable investing.
Blackrock is the world’s largest risk assessment company, whose 19,000 employees directly manage US$9.42 trillion in assets. When it comments, global capitalism listens.
And what Blackrock said about climate change was shocking to companies that had not kept up with the news.