The global broking and consulting firm will work with independent third-party groups including Volans, which is behind the Bankers for Net Zero initiative, and the Climate Bonds Initiative (CBI), a global investment organization committed to climate resilience, in creating the CTP governance committee.
The two climate organizations will be in charge of creating industry-specific solutions to be rolled-out over the coming months. They will utilize the Assessment for Low Carbon Transition (ACT) methodology to formulate an accreditation model to review business commitments to principles aligned to the Paris Agreement and science-based targets consistent with reducing global emissions to help companies move to a net-zero carbon environment.
According to Willis Towers Watson, organizations that meet the standards and achieve accreditation will be able to more easily access insurance capacity and capital to help transition to a low carbon business model.
“To ensure that organizations in high-carbon industries transition effectively, in line with what the science indicates is needed, they require robust transition plans and the ability to execute successfully against these,” said Rowan Douglas, head of Willis Towers Watson’s Climate And Resilience Hub. “By incubating Climate Transition Pathways (CTP), we are helping lead the industry in ensuring these organizations are supported through an orderly transition and can continue to access insurance and benefit from a greater level of certainty around the future availability of risk capacity, helping them deliver a more sustainable future.”
Mark Carney, UN Special Envoy for Climate Action and Finance and the UK Prime Minister’s Finance Adviser for COP26, said the whole economy – which means every company, bank, and insurance firm – must adjust their business models to achieve net zero carbon emissions.
“As insurers take steps to align their underwriting activities with the transition, companies will increasingly need to display that they have the right plans or risk losing access to insurance,” Carney said. “Willis Towers Watson’s work to develop tools to assess companies’ transition plans is a valuable contribution to this process to ensure that every professional financial decision takes climate change into account.”