AXA and the climate challenge

Why does climate change warrant AXA's attention? Because the science and the economics are now clear: climate change is not only an environmental issue, it is a broader risk to society.

Insurance companies will need to do more than simply adapt to climate change, they will need to play a proactive role in limiting risks, as some players such as AXA have started to do. But how does this translate into concrete action? What are the areas AXA can work on as a responsible insurer?

2009 Kyoto Statement: an entire industry comes onboard
Committing to the fight against climate change is not new for AXA. As a major business, the Group has already signed several private sector engagements and UN declarations. Nevertheless, the Kyoto statement, signed in 2009 by the 80 insurers who are members of the Geneva Association, is the first international statement initiated by the insurance sector affirming its own decisive role in climate-related risk prevention and adaptation. By signing up to this declaration, insurers commit to furthering global efforts through concrete actions performed in partnership with their main stakeholders.

AXA's role: a responsible player in sustainable development
AXA is, of course, working to reduce its own environmental footprint. Thanks to efficient management of our offices and the use of green technologies, we decreased our energy consumption and CO2 emissions by 17% in 2008 (compared with 2007).

The main challenge is to deliver on our engagements as an insurer. AXA defined principles and started implementing them to help combat climate change:

• Investing in research is a top priority, Because AXA believes that in order to protect tomorrow's society, we must massively invest in it today. In 2008, AXA therefore earmarked 100 million euros over a five-year period for research in the following three areas: risks for people, for the environment and for our societies. Thanks to the AXA Research Fund, AXA has become one of the key supporters of fundamental research in Europe. Climate change was one of the topics defined in the first allocation of funds.
  
• Alert government and local authorities about the new risks; recommend solutions to reinforce prevention policies by leveraging risk-related knowledge accrued by insurers. For example, accelerating the implementation of flood-risk prevention plans.
  
• Supporting technological development means rethinking our approach to risk (e.g. adapting rates, coverage or claims management) and taking into account the emergence of new needs relating to "green" processes and materials. This implies modifying insurance policy coverage and creating specific products and new risk management models and tools (such as AXA's "Technical Innovation Pool" which pools renewable energy-related risks to better develop their underwriting), or facilitating sustainable buildings certification programs (such as AXA France's "Innovation Pass").
  
• Foster responsible behavior among the general public and employees through education and risk prevention. An emphasis is placed on the creation of "green" insurance products, such as reduced premiums for low emissions cars, promoting eco-driving for retail and fleet automotive customers, assisting small and medium sized companies in flood-risk management. Developing investment funds targeting environmental best practices also falls within this scope.
  
• Improve the quality of information provided to investors by supporting the standardization of information and reporting, in order to encourage responsible investment and, as a consequence, a low-carbon economy. As a member of the Carbon Disclosure Project, AXA promotes the transparency and accessibility of information about risks and opportunities relating to corporate carbon emissions.

Set against the backdrop of the Copenhagen conference on climate change, all of these initiatives must be renewed and reinforced to effectively address the global challenges of climate change.