Environmental Issues and Financial Institutions

2 December 1997 | Tokyo, Japan The Second Roundtable meeting of the UNEP Insurance Industry Initiative on 2 December 1997 in Tokyo, Japan was a highly successful event and another step to gear up awareness in the financial sector on climate change related impacts, in particular on the insurance industry, and to address the need for an environmentally sound and sustainable investment and insuring policy. The Tokyo Roundtable was hence not by chance organized in parallel to the Kyoto negotiations on the implementation of the United Nations Framework Convention on Climate Change (UNFCCC) but rather a strong signal to governments and the private sector that climate change is happening and climate change does affect business, development and policy-making today. The outcome of the Kyoto meeting was a firm commitment to curb greenhouse gases, setting reduction targets and timeframes and further develop economic and other implementation tools, enshrined in what became the Kyoto Protocol. The UNEP Insurance Initiative was able to present a position paper on climate change which received high attention. This deserves respect for a business sector which obviously is at the forefront in taking a stand in the global warming discussions. In six meeting sessions representatives from the insurance sector presented not only the scientific backgrounds on climate change but also addressed the way how practitioners can take concrete actions now and in future in their daily business operations. The meeting participants discussed options to implement efficient and appropriate environmental management systems in the financial services sector, the current status of EMAS and ISO 14000 and the progress made with these instruments applied in Europe. Also, the relevance of environmental performance to the corporate value was touched upon and it was felt that this aspect in particular will need higher attention in the future. But how does one rate the environmental information, needed to assess investment options and asset management qualities? Which information is essential, and which of the information available is only generating data of secondary or tertiary relevance? In another session, participants discussed the environmental risks and liabilities in credit and investment decisions in greater detail, using examples from the North American markets. The location of the meeting inspired an assessment of environmental issues in the financial services sector in Asia, with particular emphasis on Japanese issues and environmental management in Asia as a whole. The similarities and distinctions to the European and American markets were truly interesting since the identification of driving forces and the diversity of those lead to specific responses in the varying national management systems. This encouraged participants to exchange views and experiences which was only possible under the auspices of the UNEP Insurance Initiative and the common goals the members are aiming for. Finally, an overview on the development of the Initiative since 1995 and the implementation strategy for the future for the Environmental Commitment was presented and new ideas discussed. Clearly, we are experiencing a significant resurgence and development of interest in the Initiative. Members are expecting a significantly higher level of activity and are also expecting to play a greater role in determining and executing the activities of the Initiative.