UN Secretary-General Ban Ki-moon’s Climate Summit on September 23, 2014 is expected to “serve as a public platform for leaders at the highest level – all UN Member States, as well as finance, business, civil society and local leaders from public and private sectors – to catalyze ambitious action on the ground to reduce emissions and strengthen climate resilience and mobilize political will for an ambitious global legal agreement by 2015 that limits the world to a less than 2-degree Celsius rise in global temperature.” (emphasis added). At CIEL, we fully believe that we must “catalyze ambitious action” on climate change, and we call on “business” to answer the UN Secretary-General to do exactly that.
In CIEL’s efforts on climate change, we have looked at the roles that “business” has played in this arena. Some are positive, like the recent “Risky Business Report” co-chaired by Michael Bloomberg, Henry Paulson, Jr., and Tom Steyer, that strives to convince others in the business community that catalytic action is needed. Other roles have been decidedly negative, including climate denialism that has aimed to obstruct action on climate change. In fact, last week, Bloomberg Businessweek reported that fossil fuel companies are funding “grassroots” campaigns to subvert legislative action on climate change.
The negative actions of “business” contribute to the American public’s inadequate response to climate change. Indeed, one in four Americans are “solidly skeptical” of global warming and only 39% are “concerned believers.”
The extent of climate change skepticism is surprising given its clear and disastrous costs. For example, one recent economic study found that the total cost of long-term economic growth to the Philippines in today’s dollars from increased cyclonic activity due to climate change is $6.5 trillion,* which represents only the loss from economic growth due to increased cyclones and does not include all the disastrous damage associated with typhoons (such as loss of life). $6.5 trillion also does not include the other climate change damage hitting the Philippines such as increased temperature (and corresponding spikes in communicable diseases), decreased agricultural production, rising sea levels, groundwater contamination, coral bleaching, decreased fisheries production, waning eco-tourism capability, etc.
The devastating impacts of climate change experienced by the Philippines highlight how important it is to stop the skepticism and apathy surrounding climate change. To do so, we need to pull that skepticism out from its roots: climate change denial and misinformation. That is why CIEL, with Greenpeace International and World Wildlife Fund International, asked fossil fuel company directors and officers whether or not they could be personally liable if their company was found to have misled regulators, investors, or the public about the risks of climate change or have worked to undermine positive action on climate change. And we also sent letters to insurers to see whether or not their directors and officers liability policies include or exclude coverage for anti-climate action activities.
These questions are important to put “business” on notice that, first, they shouldn’t act in ways that subvert action climate change; and second, as insurers, they shouldn’t provide coverage to those who do. There is a role for business to play, and we congratulate those in the public relations industry who have stood up and refused to contribute to climate change denial.
We expect the insurance industry to be part of the community catalyzing ambitious action on climate change. We ask insurers to fully examine the ethics of personally insuring directors and officers for lawsuits seeking damages for climate denialism activities. At the very least, we call on the D&O insurance industry, as well as the overall insurance industry, to fully consider the extent to which they can work with civil society to “catalyze ambitious action” on climate change.
*Present discounted value is a future amount of money that has been discounted to reflect its current value as if it existed today. 6.5 trillion assumes a 1% discount rate and equals -2,382% of Philippines current GDP ($272 Billion). Using a more conservative discount rate (5%), the authors found that the PDV of loss is 83% of the Philippine’s current GDP—still significant.
Originally posted on September 11, 2014.