Extreme weather gives rise to a growing carbon footprint through increased material and energy usage when things that have been damaged are repaired. One could see insurers, reinsurers, and state-run natural perils protection schemes take a stab at how to ensure that the negative climate impact from the extreme weather event itself is minimized. Tools such as sustainable claims settlement with greener repairs, correct pricing of carbon risk, and funding of carbon removal projects could be included in today’s (re)insurance schemes.
Only 15% of the respondents to the WEF annual risk report feel positive about the outlook for the world. In hindsight of Covid-19, almost all material risks have significantly increased in the perception of this influential group of decision makers.
It’s interesting to note that Climate action failure is now clearly the number one risk both in the medium and long term, whilst Extreme weather is on top of the list for the short term.