“The climate crisis is the greatest threat which humanity has ever faced, and the insurance industry needs to play a leading role in addressing it.”

Peter Bosshard is a Swiss native who resides in California and works for The Sunrise Project – an Australian non-profit with significant global impact. Their mission is to support social movements in scaling up the transition beyond fossil fuels as fast as possible. They are a team of experienced advocates, analysts and communicators who are driven by a passion to solve the climate crisis. As part of their work they coordinate international campaigns to convince the insurance industry, asset managers and other actors to accelerate the low-carbon transition.

Praveen Gupta: How does one transition the insurance industry and other investors from fossil fuel to clean energy? Particularly as it entails lifestyle change for every individual.

Peter Bosshard: Acting for a safer and healthier society is nothing new for the insurance industry. Insurance companies have established fire departments, prepared building codes, and created incentives for people to quit smoking. The climate crisis is the greatest threat which humanity has ever faced, and the insurance industry needs to play a leading role in addressing it. As a first step, insurers should stop covering and investing in the coal sector and should expand their services for renewable energy projects instead.

PG: The insurance industry is conditioned as a handmaiden of a larger industry which is deeply steeped into fossil fuels. How do you extricate it from this industrial age mindset?

PB: The renewable energy sector is rapidly out-competing the coal industry, with the latest solar tariffs in India for example 20-30% lower than average coal-fired power tariffs. Even so, old habits die hard and intellectual inertia as well as political patronage – the “power of incumbency” – are still extending the coal industry’s lease of life. Forward-looking insurance leaders need to understand that climate change will bring massive disruptions to our economies and societies, and they need to position their companies for a low-carbon future. Outside pressures can help with this process: In Europe, Australia and the US, protesters are blockading the offices of coal insurers, insurance clients are asking for coal-free carriers, and risk management students are making it clear that they don’t want to work for employers which underwrite climate destruction.

PG: Is there a risk of some insurers and investors taking a pro-climate posture only as a matter of positioning? In the process running with the hares and hunting with the hounds?

PB: This risk always exists, particularly in an industry that is not transparent about who is underwriting what. However, a lot of insurance professionals agree with the need to accelerate the low-carbon transition and have started sharing information about climate-destroying deals with campaign groups. Saying one thing and doing another is a risky proposition for companies with well-established public brands today.

PG: Transitioning calls for proselytising each stakeholder. Insurers generally do not seem to have a good track record of saying a ‘No’ and taking a principled stand. Where and how do you begin?

PB: Like most other businesses insurance companies indeed don’t like to take a principled stance. Yet as the climate crisis turns into an emergency. Insurers have had to learn that all actors in society are expected to act in line with international climate goals today. In the last two and a half years, 17 international insurance companies – including the world’s biggest primary insurers and reinsurers – have stopped or limited insuring coal, and more than 30 have divested their assets from the coal industry. Close to 60 insurers and other financial institutions have for example ruled out getting involved in the Adani Group’s giant Carmichael coal mine in Australia – a project which has become a global test case for responsible insurance.

PG: To what extent do you believe does the fixation with quarterly performance and short-termism come in the way?

PB: Short-termism is a big challenge for insurers as well as other business sectors. Pension funds and other big institutional shareholders need to take a longer-term view. They need to realise that it isn’t in the interest of their members and investors to maximise quarterly returns by sacrificing a livable future.

PG: Car sales in India have seriously slumped after several years of a dream run. On the flip side should this not be a blessing for our environment given the alarming state of air pollution. Moreover, an opportunity to kickstart a sustainable mobility solution?

PB: The internal combustion engine originally brought convenience but nowadays is choking our cities, our air and our climate. The future of the car is the electric vehicle, and this revolution will happen more quickly than most people expect. Yet city planners also need to realise that everyone’s quality of life improves if you don’t need cars to get around.

PG: My best wishes in all your endeavours towards decarbonising our industry.