Skip to content

“The balancing effect of stringent social and environmental policy and regulation …can harness humans’ innate creativity and self-interest to tackle a host of problems”.

Clive Scott is a pilot and musician who lives on Southern Vancouver Island with his wife of 37 years, Emma.  They have three grown sons, and are expecting their first grandchild in June of 2021.  Clive has been a pilot for 40 years and a musician since first joining the school band in Grade 5. Clive grew up on a mixed farm in rural central Alberta, and spent a great deal of time in the outdoors as a young person.  The influence of that upbringing, and that of his father-in-law, atmospheric scientist Dr. Geoff Strong, has led to Clive’s deep concern for the planet, particularly the critical threat of Anthropogenic Global Warming.  The progressive and compassionate attitudes of his parents, and the music of his youth, particularly the protest songs of the 60s and 70s, imbued in Clive a strong sense of social justice, and the importance of connection and empathy toward each other and our planet. 

Growing up I was certainly influenced by the protest songs of artists like Neil Young, Joan Baez, Bob Dylan, Bob Marley etc. 

Praveen Gupta: What’s more dominant for you – singing or composing?

Clive Scott:  Definitely composing – I’ve never particularly cared for my voice as it has quite a limited range.  And to be fair, I’ve always focused more on developing instrumental rather than vocal. I love the composing process, particularly today when one has the tools of a recording studio available at home on the computer.  I currently use Logic ProX and cover all the instrumentation on most of my recordings – unless working on a specific collaboration.

PG: Is there something about music and flying that awakens your concern for climate?

CS: I remember loving the land as a kid growing up on the farm.  And flying allows one a different perspective of the beauty of the planet. The growing awareness of the large CO2 footprint inherent in jet aviation has certainly spurred a desire to become more involved in the climate movement.  The airline I work for is taking active measures in fuel reduction and the purchase of offsets which, while far from solving the issue of footprint, is a start in that direction.

The growing awareness of the large CO2 footprint inherent in jet aviation has certainly spurred a desire to become more involved in the climate movement… Interestingly, COVID 19 has shown us that much of airline travel, while desirable, is not essential.

PG: Would your compositions be any different if you were not a pilot?

CS:  Tough question.  Probably.  I think that music reflects the conscious and unconscious rhythms of our daily lives. Flying has also taken me places I might not have seen otherwise – everywhere from New York to wild isolated areas in the Canadian Arctic.  I know that some of my music has been inspired by the landscapes and people I knew while growing up on a mixed farm in Alberta, Canada.  

PG: How’s been the evolution of the pilot in you? What did you start with and what do you fly today?

CS:  I began flying light aircraft in 1981.  My first jobs as a commercial pilot were instructing, small aircraft charter, and crop spraying.  I worked for a number of years as the Chief Pilot for a small charter company flying Twin Otters and other small aircraft in Northern Canada. Following that I worked for Bombardier Canada on a military flight training contract for a few years, followed by a three-year stint with Transport Canada as a civil aviation inspector.  In 2000 I joined WestJet Airlines, based in Calgary Alberta, and have been a captain on the Boeing 737 since 2001.  

PG: How soon do you see flying transforming as environmentally friendly?

CS:  Tough question – I don’t know if flying will ever be environmentally friendly.  The big question is, can we make it sustainable?  Certainly, there is some very promising work being done with alternate fuels such as bio-kerosene, which can reduce CO2 footprint a great deal.  H2 is more problematic due to storage and weight considerations.  There have been great strides made in electric aircraft for short range applications.   Interestingly, COVID 19 has shown us that much of airline travel, while desirable, is not essential – certainly, a lot of business is now conducted remotely.  We may eventually have to view aviation against the larger picture of decarbonization and decide how much is really essential and perhaps look at limiting its scope. 

There are currently 24 trillion worth of cash and assets stashed in tax free havens around the world – yet we are told that transitioning to a carbon free economy is too costly.

PG: Any insights into cover band and the acoustic project? What are your favourite genre?

CS:  Our cover band is called The Chameleons.  We do rock and R&B from the 60’s through to today. Stuff that’s recognizable and danceable mainly, from the Stones, Cream, and the Beatles to the Black Keys, Bowie, U2, Peter Gabriel, and the Foo Fighters.  We are 5 guys who have been around for a while – we take the music seriously but keep egos in check and just have fun with it.  I cover the guitar work in the band.  

The acoustic project is more a vocal showcase for our singer, Dylan.  He has a huge range and is very accomplished.  We are covering some of the Chris Cornell/Eddie Vedder acoustic stuff, as well as some of the Paul Simon, Led Zeppelin, Neil Young acoustic library. 

As to my favourite genre it’s really hard to say. I listen to everything from Classical to Jazz to Metal.  In terms of playing – I sure do love a good driving blues rock tune. 

PG: Does music help you influence more and more people to be climate/ environment friendly?  

CS:  I certainly hope it does.  But I’ve never had direct feedback on that specifically.  Growing up I was certainly influenced by the protest songs of artists like Neil Young, Joan Baez, Bob Dylan, Bob Marley etc. 

PG: British Columbia and Alberta are stunning havens of nature. Rampant deforestation and the tar sand projects can destroy what nature has endowed. Do you see any popular resistance to the extractive and fossil fuel business?

CS:  There is certainly popular protest aimed at resource extraction and logging in Canada.  There are currently a number of protests against the continued logging of the remaining old growth temperate rain forest in British Columbia.

The oil sands operations in Northern Alberta are spending a great deal to clean up their direct impact on the land, with varying degrees of success.  Most of the fossil fuel protesting in Canada revolves around the construction of pipelines, particularly to the West coast.   In general there is a pretty active movement across the country in favour of transitioning away from fossil fuel use.  And a number of protests in Alberta right now against the opening of previously protected land on the Eastern slope of the Rocky Mountains to coal mine expansion. 

PG: ‘Killers in Suits’ – is this composition a commentary on capitalism?

CS:  Oh, definitely.  The thing is, I’m not completely against capitalism per se.  I believe that with the balancing effect of stringent social and environmental policy and regulation, capitalism can harness humans’ innate creativity and self-interest to tackle a host of problems. But to do this strong democratic government prioritizing environmental stewardship, social justice, and compassion, is absolutely crucial. 

 “Killers in Suits” addresses the darker side of capitalism, the institutionalized and untrammelled greed that always prioritizes profit and ROI over all other concerns. (The one drop rhythm is a little nod to the social justice songs of the Jamaican reggae genre’). There are currently 24 trillion worth of cash and assets stashed in tax free havens around the world – yet we are told that transitioning to a carbon free economy is too costly. The world spends 2 trillion a year on military expenditures, yet we are told that addressing social injustice is too costly.   Addressing and shifting this paradigm is the single greatest challenge facing humanity today. 

PG: Wonderful speaking to you Clive. May your music heal the Planet.

Behind the Kerry smokescreen: Lessons on Climate Change for Indian insurers!

John Kerry’s visit to talk India into containing its carbon footprint – first demands some answers from the United States. “We believe that this exercise by the US government is a smokescreen to hide its own long record of inaction on climate change and its continual attempt to pass on the burden of climate change mitigation to other countries, especially those of the Global South that are far less equipped than the US to undertake radical energy transitions”, says a statement by Teachers Against the Climate Crisis (TACC).

Having said that, there are lessons to be learnt from the far-reaching actions unleashed by the Biden administration including those to tame its insurance industry. Banks, asset managers and insurers have for long been the critical money pipeline for fossil fuel. If the Climate Crisis must be mitigated – that is where the action ought to begin.

Sunset at Maafushi, Maldives. If the hungry tides were to gobble Maldivian islands, chunks of coastal India including Mumbai would be vulnerable, too.

Seeking answers from its insurers

Nothing can better demonstrate the resolve and urgency of the administration to rein in the US insurers from aiding and abetting the Climate Crisis than a letter sent out to CEOs of eight major insurance companies. This is signed by four Democratic party senators including Elizabeth Warren. “In order to better understand your fossil fuel underwriting and investment policies, we are requesting that you answer the following questions by April 16, 2021.

1. Have you studied how your company’s annual claims and premiums will evolve as climate-related losses burgeon over the coming decades? Which climate scenarios have you studied?

2. Have you conducted a stress test of your company’s exposure to fossil fuel assets? Which scenarios have you used? What did any stress tests reveal about your company’s exposure to fossil fuel assets?

3. How are your company’s fossil fuel underwriting and investment policies consistent with your broader commitments to sustainability?

We write you regarding your underwriting and investment policies pertaining to coal and other carbon-intensive projects such as oil and gas production from tar sands and in the Arctic and Amazon. As the leader of a major insurance company, you know the significant financial and economic risks climate change poses to both underwriting and investment.”

The letter then goes on in great detail covering the following:

Economists, central bankers, financial regulators, asset managers, investors, insurance analysts, credit rating analysts, investment bankers, real estate professionals, and scientists have produced an enormous trove of research suggesting that climate change and the failure to plan for an orderly transition to a low carbon economy are capable of producing staggering economic losses. These losses relate to the physical risk of damages caused by climate change or the transition risk of stranded fossil fuel assets as the economy transitions to low-carbon sources of energy.

It goes without saying that the physical risks of climate change pose a serious threat to insurers, both on your assets side and on your claims side. There is ample data that rising sea levels and increased storm intensity and activity will do substantial damage to coastal property values. These warnings have come from a variety of experts, including Freddie Mac, the industry publication Risk & Insurance, and the Union of Concerned Scientists.

In addition to sea level rise and coastal storms, more frequent and intense wildfires, riverine floods, droughts, and heatwaves will also result in very large losses, much of them insured. Indeed, the management consultancy McKinsey warns of massive physical risks that will increase “nonlinearly” as the earth continues to warm.

Transition risk is also significant for insurers that hold large stakes in fossil fuel assets. One economic paper reports “economic literature combined with industry practices suggest the presence of persistent market inefficiencies for fossil fuel reserves, so these assets are likely to be stranded and mispriced, i.e. a carbon bubble exists ….” Another finds “the magnitude of … stranded assets of fossil fuel companies (in a 2 degrees C economy) has been estimated to be around 82% of global coal reserves, 49% of global gas reserves, and 33% of global oil reserves.”

The market value of fossil fuel reserves that cannot be burned is “around $20 trillion,” according to the World Bank. A study done by the European think tank CEPS predicts that “fossil fuel companies altogether would see their market value fall by half.” Central banks are also increasingly concerned about transition risk.

The Bank of England has warned, “investments in fossil fuels and related technologies . . . may take a huge hit.” The Bank for International Settlements also warned of stranded fossil fuel assets in its recent report on climate-related economic risks. And a report from 34 central bank presidents warned that “estimates of losses […] are large and range from $1 trillion to $4 trillion when considering the energy sector alone, or up to $20 trillion when looking at the economy more broadly.”

Concern over the risk that stranded fossil fuel assets pose to insurers is not merely academic. A stress test of European financial institutions revealed that some were over-exposed to fossil fuel assets and could be at risk should these assets plunge in value. Indeed, the Bank of England has become so concerned about systemic risk associated with stranded fossil fuel assets that it ordered the life insurers it regulates to perform stress tests including a stranded fossil fuel asset scenario. American regulators are also beginning to signal they take climate-related financial risks seriously. Federal Reserve Bank Governor Lael Brainard warned of climate-related shifts in asset values and “abrupt tipping points and significant swings in sentiment” in the Fed’s most recent biannual financial stability report.

In response to these risks, an increasing number of your competitors have stopped underwriting coal and other fossil fuel projects and/or restricted their investments in coal and certain dirty and environmentally damaging oil and gas projects such as tar sands.

It’s in our interest to act

A small beginning has been made by select banks in the form of self-disclosure. Extreme weather puts debt worth $84 billion at risk at India’s top banks, according to Carbon Disclosure Project (CDP) – India. The country’s largest lender, HDFC Bank, IndusInd Bank and Axis Bank are among the institutions that reported climate risks to CDP in 2020, it said in its recently released annual report. While a lot more banks need to join this exercise, a small beginning has been made.

The Indian insurance regulator (IRDAI) is yet to initiate Environmental, Societal and Governance (ESG) as the way forward. The total investment corpus of all Indian insurers now adds up to US $ 600 billion. The physical and transition risks of the insurers need to be quantified. There is enough science pointing at the growing storms both along the east and west coasts, floods and droughts; sinking cities; the rising heat and humidity in the northern plains; the shrinking glaciers in the ‘third pole’ region and its grave implications for the river systems; increased deforestation and threats to bio-diversity across the country. Despite a low per capita contribution, we are already the third largest polluter in the world. Many of our cities have terrible Air Quality Indices. By insuring anything that contributes to these woes – insurers provide a further blow to sustainability.

Life Insurance Corporation of India (LIC) – the largest insurer – continues to invest significantly in fossil fuel business – including the NTPC and Coal India. Given all its environmental vulnerabilities, it is in the country’s best interest to act. And act must the insurers who may be aiding and abetting the Climate Crisis. While we should be mindful of the Kerry smokescreen and push him back, we cannot be mindless to what the US has finally started doing – something it ought to have begun three decades ago.

 

Ethics/ESG: Investments by insurers!

March 19, 2021

Asianinvestor

“Data and analytics are fundamentally reshaping the relationships between insurers, consumers, and the public.”

London based Duncan Minty is an independent ethics consultant, specialising in the insurance sector. He’s worked with a range of insurers over the past 20 years, helping them turn a commitment to ethics into practical improvements. He has written extensively on the ethical issues raised by data and analytics in insurance and was a member of the Chartered Insurance Institute’s Digital Ethics Forum. He’s currently co-writing two academic papers on data and insurance. Duncan is also a Chartered Insurance Practitioner, having worked in the UK insurance market for 18 years.

The key realisation that insurance strategists now need to take on board, is that that power situation is changing, and digital is the force behind it.

Praveen Gupta: When I started with the industry, conceptually the nearest insurers got to ethics was Utmost Good Faith and Moral Hazard. What made it formally tip towards ethics?

Duncan Minty: Problem with both of these concepts is that they were created by and controlled by insurance people, with little input or influence from policyholders, so the tip they gave to ethics was a marginal one.

For example, UGF was invariably portrayed as an obligation on the insured, when it was in fact an obligation on both parties, something which insurance people did little about.

With moral hazard, research by the legal scholar Tom Baker has shown how insurance’s handling of moral hazard evolved over time and the picture that emerges is one of its use being one of adaptation and evolution. Concepts and principles have been made to serve the needs of the market as it evolved to meet both opportunities and threats.

This process is still happening, but this time more in terms of concepts such as actuarial fairness and behavioural fairness. Again, these are all concepts controlled by and imposed by the sector on consumers. They are expressions of the power of the financial sector, over consumers and the like.

The key realisation that insurance strategists now need to take on board, is that that power situation is changing, and digital is the force behind it.

The key realisation that insurance strategists now need to take on board, is that that power situation is changing, and digital is the force behind it.

The UK’s leading scholar on ethics and information, Professor Luciano Floridi, says this…

“What we’re seeing today is the very beginning of another switch, from power over things, to power over information, to power about the questions that shape the answers that give the information about things…”

Insurers think they’re in the second phase – ‘power over information’ but what the digital era is now evolving into the third phase – power over the questions that shape the answers.

The forces that have brought about this tipping are…

  • The shift from ‘tell me’, to ‘show me’, to now ‘prove to me’. Deference to the professional is no longer a given – some sectors earn it well (doctors), while other sectors (insurance) are struggling with this shift.
  • The shift in power – digital may be revolutionising insurance (a good thing) but it is also revolutionising much wider things, and many scholars are seeing this.

PG: To what extent have Data and Tech necessitated this?

DM: Digital technology is a central force in this. It is revolutionising many things in our society, but in sectors like insurance, there is a lack of perception that digital is revolutionising power relationships, and that as a result, the sector’s decisions, performance, and outcomes are all there to be scrutinised.

In sectors like insurance, there is a lack of perception that digital is revolutionising power relationships, and that as a result, the sector’s decisions, performance, and outcomes are all there to be scrutinised.

To give you an example, for many years, insurance pricing was seen as nothing to do with ethics, and everything to do with the market. And the courts were broadly supportive of this. Now, however, as a result of the super-complaint, that perception has completely changed. You saw a civil society organisation with the special power to issue a super-complaint, doing so, forcing a regulatory review on its allegations, and finding the regulator conclude that price walking was fundamentally unfair. As a result, the most common approach to retail insurance pricing is about to be banned. Here you have the shift in power, and the use of digital technology facilitated it.

Data and analytics are fundamentally reshaping the relationships between insurers, consumers, and the public. The insurers who are recognising this are the ones designing their data and analytics to reflect those new relationships.

PG: What’s been the influence of regulatory unification? 

DM: We are definitely seeing great coordination between regulators. I think of this as a grid – you have horizontal regulators in the UK like the Equalities and Human Rights Commission, and the Information Commissioner’s Office, and you have vertical regulators like the FCA with its focus on financial services, and say, the Solicitors Regulation Authority.  Each are feeding into each other’s work.

Ethical issues don’t stay within regulatory boundaries, so this coordination between regulators is just a reflection of reality. Now there’s even a regulatory coordination group in the UK that has formalised this working together.

What regulated firms like insurers need to really tune into, is the increasing use of data and analytics by the regulators themselves. This is called supervisory technologies.

What regulated firms like insurers need to really tune into, is the increasing use of data and analytics by the regulators themselves. This is called supervisory technologies. The FCA here in the UK have been a leading proponent on this and we are seeing SupTech used in recent regulatory investigations. The FCA has even boasted about their SupTech capabilities to a Parliamentary committee.

The affect of SupTech is that it will do two things:

  • Provide the hard evidence for misconduct, potentially as a granular level – that firm in that place is making these poor decisions.
  • It will increasingly be used to identify misconduct as it occurs, rather than after the damage has been done.
  • It will provide the evidence for individual accountability being enforced with more confidence, so individual insurance executives being held to account for the decisions they’ve made, and the outcomes generated.

We’ve seen this in the UK with insurance pricing. I now expect this to increasingly happen with regard to claims. There are some claims practices that I believe will be judged as fundamentally unfair, such as claims optimisation and settlement walking. And in fact, when practices such as these come to be judged by regulators and parliamentary committee, I foresee the public’s reaction to be much worse than with price walking. Reputations in insurance have a very uncertain future.

PG: Do you expect the evolving practices across the reinsurance world influencing the conduct of insurance overall?

DM: I think that reinsurers are in a unique position. They are caught between what here in the UK is referred to as a rock and a hard place. They think in more ‘long term’ terms than the typical insurer, and so invest in trends that have the potential for revolutionising insurance. Yet the problem they often have is that some of those trends are seen as positive and some as negative. Reinsurers have to follow up on their ethical commitments and make difficult decisions around whether to step back from the negative ones or continue to invest in them.

Two examples of this are facial and emotion analytics, and the use of genetic data. The global reach of many reinsurers means that they cover markets where use of these types of analytics and data are seen as very normal, and other markets where such use is forbidden.

Two examples of this are facial and emotion analytics, and the use of genetic data. The global reach of many reinsurers means that they cover markets where use of these types of analytics and data are seen as very normal, and other markets where such use is forbidden.

So, they have to be good at handling complex ethical dilemmas, and to be honest, they’ve some way to go on this. I’ve listened to very senior reinsurance people publicly say that they couldn’t do practice A or B, while several levels down in their organisation, that is exactly what they’re doing. I’ve been on reinsurance conference panels to discuss how analytics X or Y should be deployed with great care, when the host reinsurer is already deploying it.

There is debate, but it is still too controlled by the market. Remember my earlier comments in relation to power. It’s something that reinsurers need to be very aware of, for if the powerful actors that digital has brought forward, are not then engaged with on equal terms, the result will be challenge rather than support. Many insurance people don’t realise just how much political support those powerful new actors can draw upon.

PG: Thank you very much Duncan – for sharing these critical developments in the UK. There is much to be learnt by other common law jurisdictions, sooner than later.

Extreme Risks: Lessons from India

Chartered Insurance Institute Blog: February 19, 2021

https://thejournal.cii.co.uk/2021/02/19/extreme-risks-lessons-india

My latest blog for the Chartered Insurance Institute Journal: Given that #ClimateCrisis is assuming the form of #extremerisks – insurers can ill afford to model risks in isolation. The rapidly evolving frequency and severity together with the interplay of several triggers, demands a whole new approach.

A Heating Planet: Demanding Urgent Attention!

Published in Bimaquest, January 2021

“The crime of Ecocide is more about holding a corporate or individual accountable so that it encourages them not to engage in the activity in the first place.”

Nilam Sharma is a dual UK/US qualified lawyer with over 30 years’ experience in providing insurance/reinsurance and litigation strategic advices to insurers/reinsurers and their clients on how liability policies issued to professionals, directors & officers, corporate boards, and financial institutions will respond to multi-national litigation and regulatory investigations.

For every year since 2015, Nilam has figured in the Who’s Who Leading Insurance and Reinsurance Lawyers. During 2013 – 2020 she was recognised as Leading lawyer for D&O and commercial litigation by Legal 500. She was shortlisted for the American Bar Association Outstanding Achievement Excellence Award nomination 2016 and the European D&O lawyer nomination 2014. Nilam is European author and co-publisher “Global Directors & Officers Deskbook”.  She is the Vice Chair of ABA Professional Liability Insurance Committee 2015 to present.

Nilam has lived and worked in the US, South America, Asia, and the Middle East and has a reputation for being able to bridge the cultural gap in international insurance and litigation/regulatory issues.

PG: The codification of Ecocide is rapidly underway. How would you define this new risk?

NS: I have three responses to this and one overall comment.

First, the official definitions vary. The Oxford English Dictionary defines Ecocide as “Destruction of the natural environment by deliberate or negligent human activities.” The Cambridge English Dictionary does not refer to deliberate or negligence.  The Stop Ecocide website defines this as “mass damage, destruction of the ecosystem, harm to nature, which is widespread, severe or systematic” While the phrases “deliberate” or “negligence” is not used in this definition, the definition itself I think does imply this behaviour.  

Secondly, the objective of a law on Ecocide is to create a criminal offence which is arrestable.  That itself will require a party being accused of Ecocide to have knowingly committed an illegal act which breaches the law. 

Thirdly, the above definitions are not legal. That is due to be published early this year. For this to work, the offence must have “sufficient clarity” as to what exactly is being breached to ensure that there is no room for ambiguity.

My overall comment relates to the premise of your question “The codification of Ecocide is rapidly underway”- the concept was developed in the 1970s and while there has been more attention on the harm to the climate over the past two years, and I believe accelerated by the pandemic, I do not think that it will be rapid.  The legal definition itself is going to be the subject of lengthy debate to ensure that the offences which are potentially covered, can be the subject of criminality.  I remember discussing the need for insurers and corporates to consider climate change as a risk about 20 years ago and it is only recently that society is identifying this as a necessity.

The concept was developed in the 1970s and while there has been more attention on the harm to the climate over the past two years, and I believe accelerated by the pandemic, I do not think that it will be rapid.

PG: How would the current form of insurance coverages respond to this emerging risk? How adequate or inadequate are these vis-à-vis to the definition as it is evolving? Would there be a need to design new/ tailor made covers?

NS: There are three subsets to the question and I will deal with them in turn;

A. Current form of insurance coverages

The Stop Ecocide Website has a number of examples which it considers could be a form of Ecocide (oil mining; deforestation; fracking; industrial fishing; oil spills). The damage and loss from each of these activities are covered under current insurance policies:

i. Pollution under a GL policy

ii. Legal costs under a management liability policy for investigations into a corporate or individual’s participation in allowing the above activities to occur which result in loss/damage to land/homes/livelihoods.

iii. Legal costs under a management liability or professional indemnity policy for defending a criminal offence albeit the loss/damage from the offence itself would not be a covered event in the UK/US as it would be against public policy to provide insurance for a criminal wrongdoing.

B. How adequate or inadequate are these insurances in light of the emerging risk?

In light of the intention of Ecocide being a criminal offence, the following issues arise:

How would you police any of the activities that the offence is intended to cover? Who would be held liable – the corporate or the individual?

How would you prove causation?  For example, is Company C going to be held solely responsible for deforestation of land which was already mined/fracked etc. by Companies A and B? 

How would you differentiate these activities from “natural” disasters?  Would Ecocide in fact, turn the table that in effect, none of the climate events we are currently experiencing are “natural’ disasters because to some/whole extent, they have all been caused by human activities in the past? 

Would Ecocide in fact, turn the table that in effect, none of the climate events we are currently experiencing are “natural” disasters because to some/whole extent, they have all been caused by human activities in the past? 

All the above are questions which insurers are very likely to raise before considering payment of defence costs and/or payment of any loss/damage when presented with a claim of Ecocide. 

C. Would there be a need to design new tailor-made covers?

I am not sure this is what would be required. My own view is that the crime of Ecocide is more about holding a corporate or individual accountable so that it encourages them not to engage in the activity in the first place.

If that is correct, the activities under consideration for a crime of Ecocide I believe already have some form of cover. 

PG: Could this trigger a new wave of Captives?

NS: The impact on climate is a societal, governmental and economic issue. That alone is sufficient to warrant captives being formed or a pool of money being made available (Terrorism being such an example).  So, yes, I do believe that it will trigger a new wave of Captives.

PG: If there are multiple contributors, how do you prove that only Company A caused the loss/damage when there are likely to be a number of contributing factors to the damage?

NS: Causation as a legal concept will require an examination of the facts and the chain of events.  It is not going to be easy to prove at all. That is why getting the legal definition spot on is very important.

PG: Do you think the usual suspects – fossil fuel, extractive industries, chemicals, infrastructure, building material, chemicals, shipping, aviation, auto, food and packaging are most likely to be implicated?

NS: Yes. But I go back to my point on causation above.

PG: Would this make the SMCR globally applicable and thereby more onerous?

NS: The Senior Managers and Certification Regime is about holding senior individuals to account and was brought in to plug the gap between senior and junior conduct where the juniors were held to account, but seniors were not, even though the seniors had very likely sanctioned the juniors’ behaviour. My own view is that if Ecocide does become law, then it would be a corporate offence and therefore collectively, senior management would need to ensure that their policies and compliance meet the relevant standards. 

If Ecocide does become law, then it would be a corporate offence and therefore collectively, senior management would need to ensure that their policies and compliance meet the relevant standards. 

With regard to whether it will be “globally” applicable – we only just need to look at the implementation of bribery offences worldwide – some countries have not imposed as restrictive measures as others, since business requires “workingwithothers financially” to get the contract or work done and is not seen to be an illegal act. For that reason, I do not believe the SMCR will become globally applicable and more onerous. 

PG: Would the global financial services need to incorporate these laws, once codified, in respective regulations? Would these be enforceable anyway? Where would the court of final appeal sit?

NS: Taking each question in turn:

A. Would the global financial services need to incorporate an Ecocide Law into respective regulations?

No. If drafted with sufficient clarity, the law would stand by itself which should not require further incorporation. That would just cause more confusion and potentially dilute the effect of the law.

B. Would these be enforceable anyway?

The respective regulations should stand by themselves so yes, they would be enforceable on their own. 

C. Where would the court of final appeal sit?

Do you mean jurisdiction? If my understanding is correct, the law of Ecocide is due to be a triable offence at the International Criminal Court in the Hague, Netherlands.

PG: The Economics of Biodiversity – The report better known as The Dasgupta Review was commissioned by the UK Treasury – it is expected to have a highly significant influence on government finance departments across the globe? Would this hasten Ecocide implementation? (Abridged report: https://lnkd.in/dMRYkpe).

NS: This was published on February 2nd and reactions are currently being collated to it. The basis of the review is how to account for nature in economics and decision making and the review “calls for changes in how we think, act and measure economic success to protect and enhance our prosperity and the natural world”  At a time when the pandemic has resulted in job losses, deepening poverty in both the developed and developing countries, a recession that is expected to last for the foreseeable future, I think the timing of the review is unfortunate and is likely to be buried by the UK Government until such time as the economy has stabilised. There will be some focus on it no doubt but not one that is going to be taken seriously for the time being. 

PG: Many thanks Nilam for these brilliant insights. I do look forward to revisiting the theme as it evolves.

Reconnecting with the past: A function of time and distance…

Off the busy highway, on a country road…
Through the fields. Just about where the destination is in sight and the rough track comes to a naught.
In the foothills of a volcano gone silent 500 million years ago.
Barren, taciturn, home to a firing range – yet Stoic.
The bird sounds dominate. An occasional squirrel, humans amplified, goats, buffaloes, a rooster and something tells you the ‘langurs’ are not too far.
Traces of a flightpath in a brilliant blue sky. Lo, the butterflies appear larger than whatever the aircraft that flies.
Their flutter surely does refine the air. To just the way its always been here.
The highlight today was this Kingfisher. A lone-ranger! He preys on the terrestrial worms and insects. Perhaps hates wetting the feet or the beak!
Lives somewhere in these bushes. Coz this is where it appears and disappears.
Innocent puppies in a blissful siesta! Can there be a more assured path to nostalgia?!

State of our Water Tower: News from the Third Pole!


Much has been written and talked about what’s happening in the Indo-Gangetic plain, Sunderbans, submerging coastal cities, flooding, droughts, the killer heat and humidity, increasing severity of cyclones in the Bay of Bengal, rising frequency & severity of storms in the Arabian Sea. However, the third pole tends to be out of sight. The high-mountain ‘water tower’, which acts like a giant storage tank, of the Planet’s nearly 2 billion population. According to National Geographic, climate change is hitting that region more brutally than the world on average. Insurers and risk managers need to wake up to the linkages between what happens in the plains, how it triggers chain reactions in the water tower zone and the unintended consequence for those that depend on it.

U shaped valley caused by advancing ice-age and glaciers – then the ice retreated leaving the valley as we see today! South Annapurna glacier in the Annapurna sanctuary, Nepalese Himalayas, Nepal. December 2012: With the permission of renowned photographer Ashley Cooper, author of highly acclaimed book Images From A Warming Planet.

World’s most important and most threatened

A study authored by 32 scientists from around the world assessed the Planet’s 78 mountain glacier-based water systems. For the first time, they have been ranked in order of their importance to adjacent lowland communities – while assessing their vulnerability to future environmental and socio-economic changes.

A study authored by 32 scientists from around the world assessed the Planet’s 78 mountain glacier-based water systems. For the first time, they have been ranked in order of their importance to adjacent lowland communities.

“What is unique about our study, says Prof. Walter Immerzeel of Utrecht University, is that we have assessed the water towers’ importance, not only by looking at how much water they store and provide, but also how much mountain water is needed downstream and how vulnerable these systems and communities are to a number of likely changes in the next few decades.”

The findings published in Nature, provide evidence that global water towers are at risk, in many cases critically, due to the threats of climate change, growing populations, mismanagement of water resources, and other geopolitical factors.

Of the 78 global water towers identified, Asian Water Towers relied on the river systems including Indus, Tarim, Amu Darya, Syr Darya, Ganges-Brahmaputra are ranked as the most important and most threatened ones. The most relied-upon and one of the most vulnerable mountain system is the Indus water tower, according to their research. The Indus water tower – made up of vast areas of the Himalayan mountain range – covers portions of Afghanistan, China, India and Pakistan.

Of the 78 global water towers identifiedone of the most vulnerable mountain system is the Indus water tower.

The vicious cycle

The climate model tagging technique developed by Dr. Hailong Wang, atmospheric scientist, of Pacific Northwest National Laboratory (PNNL) tracks snowpack-melting particles. “Soot on snow in the northwest plateau causes more warming than all other sources in the area. It’s bigger than the effect of greenhouse gases and soot in the atmosphere,” says Dr. Wang. “The strong heating caused by soot on snow and in the atmosphere can change air circulation over the Plateau, leading to a broader impact on climate.”

Like a dark blanket, the soot acts to warm the ice and snow enough to speed up snowmelt and shrink glaciers. The study confirmed previous work that soot causes net warming over the entire Himalayan -Tibetan Plateau (HTP) region. The work showed that soot pollution could affect the people living there by altering the seasonal water supply.

To track soot, Dr Wang’s team developed a new way to tag particles emitted from individual sources within the climate model. Biofuel and biomass emissions in South Asia make the largest contribution to annual mean black carbon burden and deposition, followed by fossil fuel in South Asia, then fossil fuel in East Asia. Cuts in South Asia can effectively reduce the soot level on the entire plateau, especially in the Himalayas.

Soot on snow in the northwest plateau causes more warming than all other sources in the area. It’s bigger than the effect of greenhouse gases and soot in the atmosphere.

Affecting 40 percent of the population

Another study by Lappeenranta University of Technology (LUT), Finland, on the climate change and geochemical process of waters and lake sediments on the Tibetan Plateau shows that global warming affects geochemical processes such as glacier melting, soil erosion and sediments release. This deteriorates water quality of rivers and lakes, thus significantly impacting the lives of 40 percent of the world’s population living in the area.

The finding indicates that atmospheric long-range transportation of pollutants in remote areas of the Himalayas might deposit at high altitudes. Precipitation during the monsoon season in the region has high concentration of nutrients implying that atmospheric pollution is possibly being transported to the Himalayas from South Asia by the India monsoon. Thus validating the fact that human activities in the surrounding area have effects on the waters of the Tibetan Plateau.

Rising temperatures export old carbon stores from ancient permafrost into contemporary rivers in the Tibetan Plateau. Global warming will continue to release more carbon to the water system, which will, in turn, intensify the regional climate change and affect water quality.

“Rising temperatures export old carbon stores from ancient permafrost into contemporary rivers in the Tibetan Plateau. Global warming will continue to release more carbon to the water system, which will, in turn, intensify the regional climate change and affect water quality. It will affect human livelihoods, rangeland degradation, desertification, loss of glaciers and more” reminds Dr. Mika Sillanpää of LUT.

With solid science evidencing the build-up of threatening climate risk triggered by anthropogenic activity, the urgency to mitigate this risk has never been so pressing. Howsoever distant the high mountains may seem, let’s not miss out the vital circularity. To those who wish to supplement the emerging scientific insights, the recent conversation between HH Dalai Lama and Greta Thunberg on ‘feedback loops’ should be distilled wisdom. Physical, transition and systemic risks – in particular – need to be rapidly addressed to safeguard the well-being of the Planet and its vast sea of humanity. And all fingers point at fossil fuels!

Innovation: Laying the road ahead!

Rather than crystal gaze early in the year, I opted for some wishful thinking. That a favourite innovation continues to stay on the top – made it 50% easier – since I was seeking for two. Allow me to begin with this moving story of a young cancer patient, in the UK, whose last wish was to swim with dolphins. The parents were equally determined. Not only InsureCancer underwrote her travel but also did whatever they could in ensuring the dream came true.

Numero Uno

So who is this unique provider? The website is crisp and comes straight to the point: “InsureCancer specialises in providing travel insurance to those with advanced cancer and we routinely provide cover for those with active, metastatic, relapsed or terminal cancer. We are also able to provide travel insurance to patients participating in cancer drug trials. Our sole purpose is providing specialist cover to those affected by cancer. Our policies are therefore specially designed for those living with cancer and provide full cover for the cancer diagnosis. Each case is individually underwritten and with specialist knowledge of the treatment and management of cancer, we are ready to consider individuals undergoing treatment such as chemo or radiotherapy. A key requirement is that holiday makers should be clinically stable and be travelling with the consent of their attending specialist Consultant”.

InsureCancer specialises in providing travel insurance to those with advanced cancer and we routinely provide cover for those with active, metastatic, relapsed or terminal cancer.

The Queen bestowed the country’s highest corporate honour The Queen’s Award for Enterprise on InsureCancer and Medi TravelCover Ltd. in recognition of: Pioneering insurance underwriting innovation for those affected by cancer. You get a sense of the intense emotional energy that goes into underwriting this class of business when you sit down for a conversation with Dr. Krish Shastri. Each story he shares is, amongst other things, a remarkable case study in empathy.

InsureCancer was founded in 2004, well ahead of Artificial Intelligence or Machine Learning becoming synonymous with innovation! So innovation is not just about tech. It is about human ingenuity. InsureCancer is an insurance solution provider that deploys science to further quality of life for a growing segment of the population.

If InsureCancer tops my list of insurance innovations till date, VaccineGuard is my ‘means to an end’ candidate for the future. Unlike Dr. Shastri who persevered and earned a doctorate in Oncology as his offering blossomed, David Piesse is a techie who continues to dabble with frontiers of tech. He also brings the unique applications to insurance and risk management. The specialisations range from Cyber Risk, ERM, Blockchain, AI to Disruptive technologies. Borrowing from Ted Levitt, David is gifted not only with ‘creativity in the idea-creating sense but putting ideas to work’. Hence my wishful expectations from him not just in terms of what he has delivered on the back of tech to the industry but what he can! This is not about AI/ML, which continue to hog limelight in terms of accelerated analysis, pattern recognition and predictive analytics. It is about a longitudinal application of VaccineGuard thereby consolidating the diverse fragments of insurance practice into a unified body. Not only would that make the industry more inclusive but more influential. But first things first!

Beyond VaccineGuard: Unbundle & re-bundle! 

VaccineGuard is a digital platform that provides end to end attestation and verification of data and actions across the many systems involved in vaccination delivery. The overall goal of the product is to enable travel both within and across national borders and reduce restrictions to social interactions. In order to successfully deploy the Covid vaccination program and equip citizens with trustworthy Certificates, authorities overseeing, and companies involved in the vaccine distribution and administration need trusted and real time situational information and assurance about: 1. The creation of each Vaccine Certificate for an identifiable person, 2. The authenticity of vaccines being used, 3. That Vaccine Certificates are being based on authentic vaccines, 4. Progress to target vaccination goals, 5. Possible Overuse of authentic vaccines for counterfeit Certificates. VaccineGuard delivers these goals via a set of functional components to help different actors throughout the value chain as all of them benefit from the same distributed data management platform. These components empower each other significantly when working together, but each module is also valuable independently. All in all a dedicated digital “trust framework”, howsoever elementary for what I am proposing. A handy and transformative tool for insurers. Needless to mention the efficiencies and momentum that it brings to globalisation.

Be it prevention, wellness or cure – response to these calls for a paradigm shift like never before. Status quo will only lead to a dead-end. Innovation may not always mean tech. Yet, tech can take as far as imagination can.

My wish list starts with ‘horizontalising’ the life-science segment – commencing with say clinical trials, bio-pharma liability, thereafter, stretching and bundling it with healthcare, travel, medical malpractice liability and other possible components. All the related ‘unbundled’ components that evolved per se – be bundled? Can this process then cross-over to the life side and dismantle the barrier (non-life versus life) to recreate a ‘composite’? With the Planet under a dual siege – climate crisis and not last of the pandemics – human well-being has never been under such a threat. Be it prevention, wellness or cure – response to these calls for a paradigm shift like never before. Status quo will only lead to a dead-end. Innovation may not always mean tech. Yet, tech can take as far as imagination can. If only the likes of VaccineGuard bridge the gaps, cover the sweep and deliver the dream by disrupting the business as usual?