An Inflection Point
The next decade represents one of the most important moments in history to make the shifts in investment and business models needed to keep global temperature rise below 1.5°C and prepare for a warmer world. As the leader in the complex and increasingly interconnected dynamics around risk, strategy and people, Marsh McLennan is helping its clients embed climate change strategies into every aspect of their businesses from navigating the transition to a resilient, low-carbon economy to managing the physical risks associated with extreme weather events.
The time to take on climate change is now
How We Help Clients: Marsh McLennan Climate Change Statement
Marsh McLennan’s aim is to be the biggest enabler of low-carbon, climate resilient investment in the corporate sector. We are achieving this by helping our clients embed climate into planning and decision-making in the areas of Risk, Strategy and People.
We help capital providers and corporations to understand and quantify climate risks, leading to better investment, lending and CAPEX decisions. We work with businesses and financial institutions to set and execute low-carbon transition strategies that collectively chart a path to net-zero. And we advise our clients on how to prepare, engage and empower their workforces in order to execute the profound transformations required.
We have been advising the world’s leading companies for 150 years, through periods of huge turbulence and upheaval. We understand that catastrophic climate change – and the speed and scale of transformation needed to avoid it – threaten disruption unlike anything that has come before. Marsh McLennan is helping its clients navigate a path from risk to opportunity, and we believe that Risk, Strategy and People will be the key to progress and to competitive advantage.
The ability to anticipate, measure and manage climate risks will be a critical advantage as the low-carbon transition unfolds and as climate change gathers pace. We help our clients ensure their businesses are resilient throughout the transition: preparing for what may happen, insuring against new types of risk, and analyzing the evolving risk environment.
Our combined team of climate scientists, meteorologists and natural catastrophe experts has a long history helping companies, financial institutions, governments, authorities and communities manage the risks of a changing climate through education, modeling, peer benchmarking, risk and insurance solutions and market assessments. We have advised the US federal mortgage lenders on long-term systemic risks in the US housing market and provided catastrophe modelling, advisory and reinsurance services to some of the largest and most innovative insurance and disaster risk programs in the world, including the California Wildfire Fund and the National Flood Insurance Program in the US and Flood Re in the UK.
We have pioneered climate risk methodologies in financial services and have helped many of the largest financial institutions to quantify and manage climate risk. As the number one ranked sustainable investment consultant in the world with over $17 trillion of assets under advice and $380 billion under management, we launched our first analysis of climate risk for investors in 2011, with subsequent updates to our industry-leading climate portfolio model released in 2015 and 2019, and in 2020 we launched the Analytics for Climate Transition (ACT) solution to help investors transition their portfolios to net-zero. We have set net-zero targets for $80 billion of our assets under management in Australia and New Zealand, and for all discretionary assets in Europe, Asia, the Middle East and Africa. We worked with 16 global banks to develop a market-leading approach to transition risk, which we deploy alongside our physical risk capabilities to provide an end-to-end climate risk solution for banking clients. We have now advised banks with almost $35 trillion of assets on climate risk and strategy. In the insurance sector, we have developed techniques to adapt catastrophe models so insurers can estimate the impacts of climate change on claims and respond to regulatory stress tests along with proprietary catastrophe models and risk scores to offer an independent view of risk.
We are supporting the transition to net-zero emissions through our work to de-risk investment in clean technology. We have built a globally integrated renewable energy businesses in insurance, assembling over 150 brokers, engineers and risk advisers to provide insurance solutions for clean energy developers, with innovative risk pooling and risk transfer solutions to overcome capacity constraints at the frontiers of energy investment.
The transition to net-zero emissions presents one of the most challenging set of strategic questions businesses have ever faced. How can opportunities for new low-carbon products and services be realized? Which technologies should be backed? What new partnerships and ecosystems should be fostered? How and when should the most costly and risky parts of the transition be financed? We are working with clients to develop transition strategies in all sectors of the economy, but particularly for the tough but high-impact transitions in energy and power, transport, manufacturing and heavy industries. We help clients to pursue a commercially smart transition plan, enabling leadership teams to deploy their financing, operating capabilities and customer relationships to achieve outcomes for which they were never designed.
In financial services, we work with asset owners, institutional investors, banks and insurers on the development and execution of net-zero strategies to help clients align their portfolios with the Paris Agreement, managing their transition risk while providing the finance to accelerate the transition in each sector.
Employees are pivotal to successful transitions. Pervasive transformation across a company’s strategy and operations requires the engagement and understanding of the whole workforce. Climate change is unlike some cost-driven transformations, because the driver for change is inherently meaningful for people, and a source of shared mission between company and employee. Companies with a clear purpose, vision and strategy, robust commitments and strong sustainability performance can expect an advantage in competing for talent as the transition unfolds. Conversely, businesses with workforces not bought into their transition plans face implementation failure.
We have helped clients transform their cultures and workforces through past upheavals. We helped Oil & Gas Companies through the safety and digital transformations, helped financial institutions rebuild after the Financial Crisis and worked with companies from across all sectors to embrace the new ways of working brought about by COVID-19.
We are now rolling out solutions to help companies build the cultures and workforces they need for sustainable transformations, from approaches to involve employees in defining corporate purpose and values, to the redesign of incentive schemes, and new techniques to acquire and embed skills based on behavioral science and flexible talent ecosystems.
Our wider commitments
Our commitment to the climate transition is reflected in our continued investment in influential partnerships and collaborations outside our work for clients. We are working with the World Economic Forum, where we support the flagship Global Risks Report and are also working on initiatives to increase renewables investment in developing countries, develop new net-zero financing models for transformation in hard to abate sectors and integrate climate risk into asset owners’ investment processes. Our businesses are building on their extensive partner networks to set new agendas, generate thought leadership and build consensus. On climate risk, we are working with TCFD and UNEP-FI in addition to a joint venture with S&P Global offering climate credit analytics. On the low-carbon transition, we work with CDP, WBCSD, WWF and coalitions such as the Glasgow Financial Alliance for Net Zero, the Institutional Investors Group on Climate Change and the Transition Pathways Initiative. We are also working on sustainable and climate-resilient insurance with The Nature Conservancy, the Insurance Taskforce of the Sustainable Markets Initiative, the Insurance Development Forum and ClimateWise.
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Meet our Experts
Meet some of our climate leaders from across Marsh McLennan: