Companies warned over cost of climate failure

Insurance giant Zurich has launched a new collaboration to guide major firms on the road to net zero with a warning those who fail to deliver will pay the price.

Zurich Resilience Solutions (ZRS), the commercial risk advisory and services unit of Zurich, are to collaborate with climate solutions provider and carbon project developer, South Pole, to provide a new climate change related offering to companies.

The two businesses say the joint offering will help businesses tackle both sides of the climate challenge at the same time, with solutions that help them to define and execute their short- and long-term climate resilience objectives as well as their net-zero goals. It will focus on measuring physical climate risk and emissions, helping to establish a strategy to reduce each, and oversee the implementation of solutions that meet a company’s goals and local regulatory and sustainability reporting requirements. The offering will initially be available in the U.S., Germany and Switzerland.

Hanno Mijer, global head of Zurich Resilience Solutions, said: “Defining and deploying effective climate adaptation and mitigation strategies requires special knowhow and can be extremely complex and time-consuming, even more so for multinationals. Demand for climate resilience services has grown exponentially in recent years. Collaborating with South Pole will allow us to address climate-related risks holistically by supporting customers on their net-zero journey as well as resilience.”

“Companies that fail to demonstrate their progress in building resilience and reducing emissions will likely pay the price both reputationally and financially,” warned Renat Heuberger, CEO, South Pole. “But knowing where to start can be difficult. We are pleased to combine South Pole’s best-in-class climate advisory with Zurich Resilience Solutions’ expertise in resilience to steer corporate leaders toward effective mitigation and adaptation efforts – both for commercial success and for climate protection.”

Zurich added: “The likelihood of missing the goal of limiting the rise in global temperatures to 1.5-degrees Celsius versus pre-industrial levels is growing by the day. To successfully transition to net-zero and mitigate the environmental impacts, companies need to intensify their efforts to collectively reduce emissions. In parallel, companies have to prepare and adapt to the consequences of global warming and consider the current and future impacts of climate change on their business when taking strategic decisions. According to the Climate Disclosure Project (CDP), the financial benefits of climate action are at least 15 times higher than the cost of risks.”

There is a growing recognition that taking climate action is not only critical to managing their operational risks, the insurer explained. There is also a growing awareness that many of their stakeholders expect companies to transparently demonstrate how they are actively reducing their environmental impact and building resilience along their value chain, and, more importantly, to regularly report on the effectiveness of these measures.

“The climate journey is a challenging one. However, through the new joint-offering, Zurich and South Pole are well positioned to help companies take concrete steps and make climate mitigation and adaptation a priority to risk-proof their current and future operations, ensure compliance with evolving regulatory requirements, and create long-term value for their shareholders,” it added.