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Facing the Climate Challenge

COP27

Marsh McLennan @ COP27

We will be leading efforts to unite the insurance sector around climate change solutions.

Marsh McLennan @ COP27

We will be leading efforts to unite the insurance sector around climate change solutions.

 

Takeaways and Insights from COP27

Achieving the net zero transition and addressing the changing physical risk levels that we are already observing across the world are the two key strands of climate action currently debated at COP27.  Significant efforts are needed to respond to both. As delegates from across the world, industry and financial sectors, civil society and academia come together in Sharm El Sheik to seek new solutions and form alliances we share Marsh McLennan perspectives on three key COP27 challenges: 

The adaptation challenge

The example of flooding illustrates why limiting global warming is so important.  And it shows what tools are available to adapt to the changing risks and become more resilient. Flooding is the most pervasive among natural disasters, with more than 250,000 lives lost and damages exceeding $1 trillion globally since 1980. Flood risk in on the rise due to climate change and the increasing concentration of people and assets in exposed areas, yet its many cascading impacts on socioeconomic, financial, and environmental systems routinely lead to an underestimation of its true costs. Despite advancements in markets, solutions, and data, current approaches to flood risk management are often inadequate and not future-oriented. Marsh McLennan’s Flood Risk Index leverages information from international institutions and academic research to provide a global overview of the threat of flooding, show how this is set to increase due to climate change, and present solutions for resilience. According to the Index, 18% of the world’s population is currently threatened by flooding, a percentage set to double in a 2 °C warming scenario. The tool also presents information on infrastructure at risk. For example, 23% and 41% of the global energy generation capacity is estimated to be located in flood-prone areas under present-day conditions and in a 2 °C warming scenario, respectively.

The smart grid challenge

Achieving the net zero transition depends heavily on the roll-out of smart energy grids. Power grids worldwide are under pressure from a more volatile climate, growing demand for renewable energy, and rising urbanization. The Making the Switch: Navigating the Smart Grid Transition report discusses how innovative combinations of advanced technologies will accelerate innovation towards a "Smart Grid 2.0" that can address legacy operational challenges and create commercial opportunities across the energy sector. This report also explores ways in which existing energy grids can benefit from smart technologies and provides practical guidance for overcoming challenges as energy system players navigate this transition. 

The need for partnerships

Moving to a ‘whole-of society’ response to the climate challenge is essential. In this BRINK article, Richard Smith-Bingham, Executive Director of Insights, Marsh McLennan Advantage shows that governments and administrations must not only focus on enhancing the capabilities and connective tissue within the public sector, but also on mobilizing the broader ecosystem that will deliver the outcomes desired. Governments inherently lack the financial and other resources needed to address complex crises by themselves. Indeed, claiming too much of that role for the public sector undermines the goal of building resilient economies and societies. More specifically, it can reinforce moral hazard and squander opportunities to mobilize the capabilities and energies that exist in other sectors—especially the private sector—to address critical challenges.

Our COP27 team 
Julian Enoizi
Global Head of Public Sector, Guy Carpenter
Julian Enoizi leads Guy Carpenter’s Public Sector practice, where he works with the global team to identify opportunities to address systemic risks, such as cyber and climate change and develop innovative solutions that facilitate a closer working relationship between public and private entities. Working with Marsh McLennan’s other businesses, including Marsh, Oliver Wyman and Mercer, he is continuing to build on the company’s position as the market leader in the sector. Julian has been in the industry over 25 years leading international insurance operations in Continental European, London and Lloyd’s markets.
Amy Barnes
Head of Sustainability &Climate Change Strategy, Marsh
Amy Barnes is responsible for leading Marsh’s global strategy on the development of climate and sustainability-related initiatives for clients, particularly in relation to the impact of a changing physical risk landscape, improving access to capital for green initiatives and a more thorough understanding of climate-related project risk. She also participates in Marsh McLennan’s Sustainability and Climate Change program, which focuses on developing sustainability and climate change services.
John Colas
Partner, Climate & Sustainability, Oliver Wyman
John T. Colas has worked in each of the world’s principal financial centers advising senior management in financial services and the public sector on critical matters of strategy, regulation and risk and capital management. John also serves on Marsh & McLennan’s Climate Risk & Sustainability Task Force as well as the Government Steering Committee. John is currently leading Oliver Wyman’s project team assisting the United Nations Environment Programme – Finance Initiative and a Working Group of 16 leading banks to develop a framework to assess and disclose climate-related risk factors.
Francis Bouchard
Managing Director, Climate, Marsh McLennan
Francis Bouchard is an accomplished global public affairs professional who has served as an advisor, catalyst and contributor to a series of climate resilience and insurance initiatives. He is currently the Managing Director for Climate at Marsh McLennan, and earlier served as the Group Head of Public Affairs & Sustainability for Zurich Insurance Group, where he focused on aligning the Group’s government affairs, sustainability and Foundation activities.He originally joined the insurance sector in 1989, and since has held a series of industry-focused advocacy, communications, sales, citizenship and public affairs roles, both in the U.S. and in Switzerland.
Swenja Surminski
Managing Director, Climate, Marsh McLennan
Knowledgeable on both the physical impacts and the net-zero transition agenda, Swenja Surminski is a leading international expert on climate change, resilience and disaster risk management with a special focus on risk financing, insurance and risk governance in a broader sustainability context. She joined Marsh McLennan from the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, where she was Deputy Director and the Head of Climate Adaptation Research, and where she continues to hold a role as Distinguished Policy Fellow focusing on Sustainable Finance and Natural Capital.
Cara Williams
Global ESG Strategy Lead, Mercer
Cara Williams, Senior Partner, is ESG Strategy Leader for Mercer. Located in London, Cara leads the program of work to articulate and amplify Mercer’s ESG value proposition and positioning, embed sustainability in the journey to a bright future, and drive highly-practical, relevant and value-added outcomes both internally and externally. Cara oversees the Mercer’s Private Wealth businesses in Canada and India, and also works with Mercer’s multinational clients to deliver the best of Mercer’s broad Wealth solutions to assure positive financial outcomes for organizations and their employees. Cara presents regularly on global ESG, sustainability, diversity and investment trends.

 

Introduction

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 our 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.

Read Marsh McLennan’s Climate Change Statement

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.

Featured Content

From commitment to action

Perspectives from Marsh McLennan experts on the decarbonization of businesses and energy systems

From commitment to action

Perspectives from Marsh McLennan experts on the decarbonization of businesses and energy systems

Our Latest Insights

Highlighted reports and articles from across the business

Fulfilling a Legacy of Societal Risk Management

This initiative applies insurance sector capabilities to a series of projects that show the power of insurance

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High Seas: Enabling a Climate Resilient Suez Canal

Physical climate change-related risk impacts of global shipping, and methods to build resilience at a local level

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Natural Catastrophe Protection Gap

Collaborative innovation between the public and private-sector insurance industry is vital to the protection gap in Asia

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A Case of Impact Investing

Investors are increasingly opting to go beyond ESG considerations to support positive change through impact investing

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The Decade of Delivery

Companies’ impacts on climate and nature are linked – and need to be addressed in collaboration with their value chain

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The Insurance Industry and the Middle East

Explore how the insurance industry can play a positive role in building a more resilient Middle East

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Embracing Nature

This report outlines the importance of the nature agenda and the different risks that companies face

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Too Hot to Work

Agricultural workers are a significant part of the workforce and they are especially susceptible to extreme heat

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Journey To Sustainability

Procurement teams are progressing on sustainability and the areas they should focus on in the years ahead

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Advancing the transition

Seeking to mitigate risk and driving adaptation beyond COP27

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Podcasts, webinars and videos

Finance Sector Must Lead Way To Lower CO2 Emissions

Episode 3 shares a compelling vision for an aggressive action to meet the UN’s sustainability goals to lower C02 output and mitigate the worst effects of climate change

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Deep Connections (ESG and Risk Management)

Dive into the environmental, social, and governance risks for technology companies and the importance of a strong risk mitigation framework around them

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Is Climate Change to Blame for Increasing Losses?

Evidence indicates that climate change is only one factor in increasing insured losses. Experts share their insights on this complex issue

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Regenerate and Restore

In this episode, a discussion about the recent Investor Group on Climate Change (IGCC) paper for investors on the circular economy

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The Hype around Hydrogen - Part 2

The Energy Current Podcast series continues its discussion regarding hydrogen's role in a clean energy future

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From Targeting Inaction to Ineffective Action

Climate litigation has broadened to include disingenuous climate commitments and greenwashing

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Climate Transition Talks

Hear from climate and sustainability leaders from some of the world's largest corporations on how they are turning their commitments into action.

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