Willis Towers Watson has launched an accreditation framework called Climate Transition Pathways (CTP) to help insurance companies and other financial institutions to identify which companies have robust transition plans aligned to the Paris Agreement.
CTP is intended to provide a consistent approach to assessing how companies are transitioning to a low-carbon economy. The CTP governance committee will work with independent third-party groups including Volans, a consultancy responsible for the Bankers for Net Zero initiative, and the Climate Bonds Initiative (CBI), a global investment organisation committed to climate resilience.
Committee members will be responsible for creating industry-specific solutions to be rolled-out over the coming months. They will use the assessment for low carbon transition (ACT) methodology and map the output to a robust accreditation model to review business commitments to principles aligned to the Paris Agreement.
Organisations meeting these principals and achieving accreditation will gain access to insurance capacity and capital to support their orderly transition and help them meet their low-carbon commitments.
Mark Carney, UN special envoy for climate action and finance and the Prime Minister’s finance adviser for COP26, said Willis Towers Watson was delivering a valuable service in helping businesses achieve their climate targets.
“To achieve net zero we need a whole economy transition - every company, bank, insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them,” he said. “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.”
Rowan Douglas, head of Willis Towers Watson’s climate and resilience hub, said: “By incubating CTP we are helping lead the industry in ensuring... organisations 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.”
Willis Towers Watson, Climate Transition Pathways, Mark Carney, Rowan Douglas