ARTICLE
18 December 2019

2020 Is The Year Climate Risk Will Go Mainstream

CC
Clyde & Co

Contributor

Clyde & Co is a leading, sector-focused global law firm with 415 partners, 2200 legal professionals and 3800 staff in over 50 offices and associated offices on six continents. The firm specialises in the sectors that move, build and power our connected world and the insurance that underpins it, namely: transport, infrastructure, energy, trade & commodities and insurance. With a strong focus on developed and emerging markets, the firm is one of the fastest growing law firms in the world with ambitious plans for further growth.
The insurance industry has a multi-faceted role to play in managing climate change: modelling and understanding climate risk, underwriting for adaptation and a greener economy and as an institutional
United Kingdom Insurance

Insurers will ramp up efforts as regulation and disclosure goes global.

The insurance industry has a multi-faceted role to play in managing climate change: modelling and understanding climate risk, underwriting for adaptation and a greener economy and as an institutional investor.

In 2020, as insurers and banks ramp up their efforts to identify and manage climate risk more strategically in line with the PRA's supervisory statement SS3/19, many are expected to adopt TCFD recommended disclosures (Task Force on Climate-Related Financial Disclosures). Further efforts will no doubt be required as financial supervisors worldwide consult on regulation of climate risk – for example, through the Network for Greening the Financial System – and best practice on disclosure and risk management begin to emerge. Mark Carney's appointment as UN special envoy for climate action and finance will raise the profile and ambition of finance for resilience still further and support the evolution of new frameworks for financial reporting and risk management.

Against this backdrop, we predict that in the run-up to COP26 in Glasgow, the combination of social expectation, regulatory pressure and commercial opportunity will align to make climate change a defining issue for insurers in 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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