Why we started Claims Carbon Institute

There’s no greater challenge

A key existential risk we face is ecological collapse. The term refers to a situation where an ecosystem suffers a drastic, possibly permanent, reduction in carrying capacity for all organisms, often resulting in mass extinction.

Although there is no single cause for ecological collapse, several attributing factors can be pointed at:

“Important pressures contributing to current and future ecological collapse include habitat loss, degradation, fragmentation, overgrazing, overexploitation of ecosystems by humans, human industrial growth and overpopulation, climate change, ocean acidification, pollution, and invasive species.”

Of the above, climate change has received most attention, and rightfully so. It’s safe to say that unless successfully dealt with, climate change might become the main reason we face ecological collapse.

Climate change “includes both global warming driven by human emissions of greenhouse gases (GHG) and the resulting large-scale shifts in weather patterns“. The main driver of warming is the emission of greenhouse gases, of which more than 90% are carbon dioxide and methane. These emissions come mainly from fossil fuel burning (for energy), but also from agriculture, deforestation, and manufacturing.

Enter Climate Tech

This is where Climate Tech enters the picture. It deals specifically with addressing climate change and can on a high-level be defined as “any new business model and technology that mitigates the impacts and drivers of global greenhouse gas emissions”.

Going a bit deeper, PwC defines Climate Tech as follows in their recent report The State of Climate Tech 2020:

“Climate Tech encompasses a broad set of sectors which tackle the challenge of decarbonising the global economy, with the aim of reaching net zero emissions before 2050. This includes low-to-negative carbon approaches to cut key sectoral sources of emissions across energy, built environment, mobility, heavy industry, and food and land use; plus cross-cutting areas, such as carbon capture and storage, or enabling better carbon management, such as through transparency and accounting.”

We wholeheartedly agree with the assessment that there’s arguably no greater innovation challenge for today’s founders, technologists, industry leaders and investors.

The world has ten years to halve global greenhouse gas emissions before we reach 1.5°C of global warming, beyond which scientists warn that dangerous impacts will kick in, and we want to be part of combatting this through Climate Tech.

The insurance industry can play a major role

The global insurance industry is a massive 6 trillion dollar industry that we all rely on, both in business and private life. Insurance companies come to the rescue in unexpected situations and help by fixing what’s been broken. However, in that process there is a sizable carbon footprint.

As an example, the global GHG emissions linked to motor insurance claims alone add up to 200 million tonnes of CO2e, according to our estimate. This corresponds to the energy use per year of 20 million homes.

It’s vital that insurers identify and calculate the GHG emissions associated with their claims handling processes, because due to the sheer size of the industry, they can make a great impact through data-driven and enlightened purchasing decisions.

We understand insurance and build data-intensive software

All of us at Claims Carbon Institute are experienced insurance professionals. Combined, we have over 50 years of experience from the industry. We know how insurance companies are run and what the opportunities and challenges are specifically in claims handling processes.

We’re also big fans of software that thrives on massive amounts of data. We know how to build modern and easy-to-use software that’s easy and frictionless to adopt.

By combining claims data with our own proprietary data sets, insurers can reach a completely new level of insight regarding their Scope 3 GHG emissions. This in turn will enable them to set compelling targets and track emissions over time in insurance claims.

Besides being “the right thing to do”, we believe that having a laser sharp focus on GHG emissions across the entire value chain makes perfect business sense for insurance companies. The early adopters will be in a unique position to meet the needs of stakeholders and attract new customers through public disclosure of GHG emissions, progress toward GHG targets, and demonstration of environmental stewardship.

Our mission is to help the insurance industry decarbonize insurance.