Willis Towers Watson (WTW) has launched an accreditation framework to provide insurers with a consistent approach to identifying organisations that have robust transition plans aligned to the Paris Agreement.
WTW said its Climate Transition Pathways (CTP) framework would provide assessment of a firm’s performance in terms of its commitment to principles aligned to the Paris Agreement and science-based targets for reducing global emissions.
Those organisations that achieve accreditation through the framework will have the opportunity to access insurance capacity and capital to support their orderly transition and help them meet their low-carbon commitments, WTW said.
Rowan Douglas, head of the climate and resilience hub at WTW, said: “To ensure that organisations in high-carbon industries transition effectively, in line with what the science indicates is needed, they require robust transition plans and the ability to execute successfully against these.
“By incubating CTP, we are helping lead the industry in ensuring these organisations are supported through an orderly transition and can continue to access insurance and benefit from a greater level of certainty around the future availability of risk capacity, helping them deliver a more sustainable future.”
WTW said the CTP will utilise the Assessment for Low Carbon Transition methodology and map the output to a robust accreditation model. The broking and advisory group said it would work with independent third-party groups including Volans, a consultancy responsible for the Bankers for Net Zero initiative, and the Climate Bonds Initiative, a global investment organisation committed to climate resilience, to create a CTP governance committee.
Mark Carney, UN special envoy for Climate Action and Finance, said: “To achieve net zero we need a whole economy transition – every company, bank, insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them.
“As insurers take steps to align their underwriting activities with the transition, companies will increasingly need to display that they have the right plans or risk losing access to insurance.
“WTW’s work to develop tools to assess companies’ transition plans is a valuable contribution to this process to ensure that every professional financial decision takes climate change into account.”