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Chinks in the armour

Nov 24, 2022

ILLUMINEM: November 24, 2022

This column: covers some chinks in the armour that came up for discussion whilst the #COP27 was on. ‘Loss and damage’, only one to surface inside the ring, ensured an exothermic end to the COP. “A fund for #lossanddamage is essential – but it’s not an answer if the #climatecrisis washes a small island state off the map – or turns an entire African country to desert, warned UN Secretary General António G. “It didn’t quite deliver”, believes Alessandra Lehmen. And this strong pronouncement from Thomas O. Murtha: It’s “just monetizing a crisis for profit”. Handing over an empty bucket, to the most vulnerable of countries in #GlobalSouth, was bound to evoke strong responses, such as these. Is anyone surprised?

Prognostics of a few tools coincidentally popped up whilst the COP was on. For instance, climate #modeling failing to capture strengthening wintertime North Atlantic jets and impacts on Europe is under scrutiny. #Pricing and #reserving shortcomings’ ability to aggravate and trigger #existential crisis for insurers – just when they need to be most stable. As a consequence, they could be flying blind in an adverse climate change situation.

Tamara Close, CFA focuses on ‘climate proofing’ investment concerns. Prof. Shiva Rajgopal, on the other hand, analyses top ten U.S. P&C insurers vis-a-vis Axa, which he considers as the current gold standard in Climate risk management. His grave reservations translate into a three-part sequel for the Forbes. Must also mention the Blended Finance Group’s release of its pathbreaking report ‘Riding the Dragon’ as the theatre of the absurd unfolded at Sharm-al-Sheikh. #Anthropocentric misadventures in the #ESG arena (#greenwashing, and its ever-growing manifestations included) will invite serious wrath in the form #fiduciary#breaches and #litigation.

With vested interests slowing and blocking desired measures, are we headed for one last resort? These words of author Robert Christie may just turn out to be prophetic: “The only potential leverage that seems to remain is for the mobilization of large populations to form social movements that are too big to fail. That may be very difficult to accomplish, but it will become increasingly feasible as global conditions become much worse and political regimes become more unstable”.

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