UNEP FI, Insurance Companies Launch Risk Management Initiative

Principles for Sustainable Insurance27 June 2014: The UN Environment Programme (UNEP) Finance Initiative (FI) and global insurance companies launched an initiative to tackle natural disaster risk by identifying the most effective measures to combat disasters and helping communities implement them.

The UNEP FI Principles for Sustainable Insurance (PSI) Initiative brings together insurers to help communities manage risk through improved understanding, prevention and reducion of environmental, social and governance risks, and improved managing opportunities to provide quality and reliable risk protection.

Speaking at the first UN Environment Assembly (UNEA), UNEP Executive Director Achim Steiner said the PSI Initiative "harnesses the wealth of risk management expertise in the insurance industry and is putting it to work to find solutions for global sustainability challenges."

The PSI Initiative's Global Resilience Project represents a phased approach to protecting communities from natural disasters. Led by Insurance Australia Group, the Project has just completed its first phase, which assessed the effectiveness of disaster risk reduction (DRR) measures across the three most devastating types of natural hazards (cyclones, earthquakes and floods). The findings are outlined in a report titled 'Building disaster-resilient communities and economies.'

The report assessed: DRR measures according to cost, economic benefits, and potential to save lives and reduce the number of people adversely affected; and downstream benefits to communities beyond DRR. It claims that insurers play a key role in disaster risk management (DRM), including by identifying, assessing and reducing disaster risk.

The report draws broad conclusions across regions, including that: for cyclones, natural coastal protection ecosystems can reduce risk in a similar way to structural measures; for earthquakes, appropriate building codes are necessary; for floods, measures that block water can work hand-in-hand with structures that divert water downstream; and for all hazards, educating the community and stakeholders, conducting risk mapping, and developing robust evacuation procedures are necessary.

The report also highlights: inconsistencies in available risk reduction research as a significant barrier to identifying the most effective risk reduction measures in vulnerable communities; and that universal data standards are essential in helping communities assess their risk levels and best responses.

The Global Resilience Project's next phase will develop a global disaster map to identify communities most in need of risk reduction efforts, and seek to engage communities, governments and other stakeholders in investing in disaster resilience and in implementing the most effective measures. [UNEP Press Release] [UNEP FI PSI Website] [Publication: Building Disaster-resilient Communities and Economies] [IISD RS Coverage of UNEA]