IAR Americas: US regulations on climate concerns not up to speed with risks

Channels: Risk, Governance, USA focus

Companies: Nephila Climate

People: Barney Schauble

US regulations on climate change are not up to speed with the associated risks, which is making it more challenging for insurers to implement climate-friendly investment policies in the country, according to Barney Schauble, chairman of Nephila Climate, an investment manager specialising in reinsurance risk.

“US insurers vary in how they think about ESG: it’s not clear that they are taking more aggressive steps on social or governance considerations, relative to environmental concerns. The fragmented nature of state-based regulation and the wide array of products offered obviously make a uniform sector approach quite challenging,” he told Insurance Asset Risk ahead of its Americas event, this year being held virtually.

The topic of climate change from an investment angle has been picking up in the USA over the last few years, according to Schauble.

“We have seen sophisticated investors focus on climate change as a driver of future investment returns – both as a risk, and as a catalyst for changes across all sectors of the economy,” he said.

A number of non-profit organisations and frameworks have come out of the country aimed at tackling sustainability disclosure, including the Sustainability Accounting Standards Board, while insurers have also followed recommendations from institutions like the Task Force on Climate-related Financial Disclosures. It will help the industry.

“Better disclosure results in better information for investors, and better pricing for risk and return across all markets,” he said.

Even so, the USA has been slow to embrace the topic as fully as other countries and may bear a huge responsibility in the collective failure in tackling climate change, according to Michele Lacroix, head of group investment risk & sustainability at Scor, who will also be speaking at the event.

Insurance Asset Risk Americas will be held as a virtual conference this year due to COVID-19. The conference will take place on 22 and 23 of September, more details can be found here.


Stephanie Harris