CTC 010: Sustainable Insurance: Balancing Risk, Regulation and Opportunity with Gillie Fairbrother and Michael wrathall

What responsibility do small insurance firms have to implement sustainable practices, and encourage their clients to do the same? What initiatives can SMEs put in place to cut down on their carbon footprint without compromising their bottom line? Or is a transition towards sustainable efforts ultimately commercially beneficial? At Macaii we believe that podcasting is the best way to learn, and this episode of Changing the Conversation is a testament to that endeavour. We are thrilled to be speaking with Gillie Fairbrother and Mike Wrathall in a highly engaging and informative episode covering the importance of embracing sustainable practices as an industry, and the practical steps smaller firms can take to do so. This conversation cuts through the buzzwords and vague broad strokes discussions about a need to create change, highlighting the profound responsibility and the various opportunities that sustainability represents for our industry.   Quote of the Episode “The insurance industry as a whole has a massive role to play in sustainability. It's an investor. It's one of the biggest investor groups in the world. It's an enabler of business. So, whether you're an oil rig or a new wind farm, you need insurance to get that project off the ground. What the insurance industry chooses to insure is what happens, effectively. So, if the industry moves away from insuring so-called ‘dirty economy’ things over a period of time and moves towards insuring new areas that are breaking ground, it can really enable those new areas, new climate technologies to get off the ground, and it can help phase out the other areas.”   When assessing our sustainable responsibilities as an industry, it is key that we examine not only the direct, first-hand carbon footprint of our own businesses, but also those of our clients. By insuring our clients’ businesses, we are effectively interconnected with their sustainable efforts, or lack thereof. By insuring businesses that deploy or harvest fossil fuels, we enable them and must take some responsibility for the damage they cause to our environment. Equally, this presents an opportunity. If we can encourage our clients to transition towards new practices and green technologies, we can precipitate extensive, sustainable change across an array of businesses, industries and economies.   Key Takeaways As an industry, we have the power to nudge the business community in the right direction with regards to sustainability. We can use policy terms to behaviourally transition clients away from outdated practices, ratcheting premiums up and down in response to sustainable endeavours. Yet, whilst we undoubtedly hold significant power in the sustainability conversation as an industry overall, our economy is primarily comprised of small businesses (99%) which may feel somewhat powerless to contribute anything significant beyond compliance with sustainability regulations. The same is true for small insurance firms. Both Gillie and Mike affirm that firstly, it is key to identify what your business’ exposure is, and identify where to play in the sustainability space. Could your business cover a new or growing area, such as climate tech or wind farms? Can you incorporate sustainable efforts into your policies to encourage good behaviours in your clients?   Ultimately, our industry aims to make its clients’ businesses more viable and successful. If we are to encourage sustainable efforts in our clients, it is key to identify and illuminate the demonstrably positive impact of such practices on their bottom line. There will always be a range of client needs with regards to sustainability, with some simply wishing to comply with regulations, and others aiming to positively impact the planet through their work. Wherever our clients fall on that gradient of ambition, articulating the opportunity for their bottom line will always help to push them up that curve. Not only is sustainability ultimately a profitable enterpri