Zurich Insurance seeks to help address the problem on global warming by investing $1B in projects to ward off devastating weather conditions such as the cyclone Haiyan that destroyed parts of the Philippines early this month. This move by the Swiss financial group reflects its response to the increasing demand for social investments.
Green bonds
Zurich Insurance is preparing to invest around 0.5% of its green bond portfolio worth $200 billion coming from the World Bank and other organizations. By using part of its green bonds, the financial group aims to maintain sustainable progress without necessarily abdicating fiscal returns. According to a spokesperson, this is just an initial step and that Zurich is thinking of adding more to the allocations to include non-dollar green bond denominations when the group has appraised the preliminary funding.
The spokesperson further said that impact investing has become a popular method with both financial companies and investors who want to serve various social interests while gaining revenues. JP Morgan, through its JPM, Fortune 500, has calculated that investors can put up an average of $9billion worth of community investments in 2013 alone.
Disillusioned investors
The recent global financial crisis as well as financial frauds and Wall Street misdemeanor have resulted to investors disillusioned with standard investments. On the other hand there is a budding consciousness on the diminishing natural resources and rising ecological imbalance that help encourage the need to do virtuous deeds especially among the youth. Through the planned $1B investment, Zurich Insurance will turn out to be the largest bearer of dollar-based green bonds, extending to about 10% of the world trading business.
Climate change direct impact
Zurich Insurance, a global insurance company, is one of the most influential financing groups in the world. Its assets and investments are exposed around the globe, thus its financial stand is directly affected by climate change and the degradation of natural resources. Munich Re said that due to the occurrence of extreme weather conditions and ensuing calamities over the past three decades, there have been $76 billion of insured losses particularly in East Asia.
Super typhoon Haiyan, the most recent calamity that caused massive destruction in the Philippines early in November, left thousands of casualties and scores of destroyed properties. The storm literally wiped off many towns in central Philippines, causing several billion dollars worth of damage. Unfortunately, many of the victims are most likely uninsured. Researches show that the long-term climate change is caused largely by fossil fuels and carbon emissions that trap heat in the earth’s atmosphere. Such studies have been treated as controversial but are accepted as a fact.
Funds for initiative projects
By funding anti climate change programs, Zurich’s money will be used for initiative projects such as promoting energy efficiency in Turkey and lessening carbon dioxide emissions by more than 1.4 million tons every year. Putting cash investments on solar, geothermal and other energy resources that are not capable of being depleted will help realize climate change management.
Act now
There is a need to act now and not wait for full scientific results before doing something to alleviate climate change, according to Naderev Sano of the Philippine Climate Change Commission. This rejoinder came about from the CNN coverage of typhoon Haiyan’s horrific devastation of some provinces in the Philippines. Sano emphasized that lives and resources are very important not only in the Philippines but other nations that are affected by climate impacts.
Photo Credit: Havoc left by Typhoon Haiyan in some parts of the Philippines
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