Willis Towers Watson (WTW) has launched Climate Transition Pathways (CTP), an accreditation framework that provides insurance companies and financial institutions with a consistent approach to identify which organisations have robust transition plans aligned to the Paris Agreement. The new framework will also support their role as stewards in the transition to a low-carbon economy.
A press release issued by WTW says, “Working with independent third-party groups the CTP governance committee is being created and the new initiative will include Volans, a consultancy responsible for the bankers for net zero initiative and climate bonds initiative (CBI), a global investment organisation committed to climate resilience.”
The committee members will be responsible for creating industry-specific solutions. They will utilise the assessment for low carbon transition methodology and map the output to a robust accreditation model to review business commitments to principles aligned to the Paris Agreement and science-based targets consistent with reducing global emissions to help companies move to a net-zero carbon environment.
Organisations meeting these principles and achieving accreditation will have the opportunity to access insurance capacity and capital to support their orderly transition and help them meet their low-carbon commitments.
UN special envoy for climate action and finance Mark Carney 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,” said Mr Carney.
WTW head of the climate and resilience hub Rowan Douglas 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 ensuringthese 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,” said Mr Douglas.
CBI CEO Sean Kidney said, “Our climate and environmental challenges are extraordinary. Responding to those, and to consumer and regulatory pressure, all businesses are reviewing their sustainable credentials. They need tools to help them do so.We are delighted to be collaborating with WTW and be part of the governance committee which will pioneer CTP and provide a standard which will help businesses move to a more sustainable future.” A