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Rapidly transitioning towards a low carbon and resilience global economy requires major investments. All financial institutions - public and private – need to engage in climate-friendly development financing, by developing new strategies, building capacities, and creating new financial mechanisms. Photo ©jdobane

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Photo by: Darkday (Flickr)

Website: http://unepfi.org/pdc/

Contacts: Shaun Tarbuck, ICMIF's CEO, shaun@icmif.org or Mike Morrissey, IIS's CEO, mmorrissey@iisonline.org

The Smart Risk Investing (SRI) initiative focuses on the insurance community, that control more than $30 trillion, to ensure that risk and resilience as defined by UN global agreements – such as Sendai and Sustainable Development Goals – are taken into account in their stock selections across all assets classes. The initiative aims at driving more investments into smarter risk and resilience projects that will benefit to public, private and mutual organisations.

The financial instruments vehicles associated with this initiative are asset classes invested by insurance organisations: bonds which are both corporate and governmental (including green bonds, infrastructure bonds and resilience bonds), stocks (both public and private), property, mortgages and loans.

The initiative was launched at the New York Climate Summit in 2014, and it is led by the International Cooperative and Mutual Insurance Federation (ICMIF) and the International Insurance Society (IIS).

Objectives:

  • to double the amount invested in Smart Risk Investing (ex-Climate Smart investments) by the global insurance industry from the recognized amount of $42 billion, as per World Bank Report 2012, to $84 billion by December 2015;
  • to increase the invested amount tenfold by 2020 to $420 billion (compared to 2012);
  • to provide a definition and working framework of Smart Risk Investing that has the support of the insurance industry via ICMIF and IIS to enable behavioural change within the insurance investor community;
  • for insurers – to have 10% of their investable assets in SRI approved assets (Not confirmed at this stage).

Action Plan:

  1. Firstly, measuring the amount invested in SRI by the industry via a self-assessment measurement program.
  2. Then, building the definition and framework of SRI with industry consensus.
  3. Finally, measuring annually the amount invested in SRI by the industry to ensure progression

Photo credit: Darkday (flickr)

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