Findings of major study underline need for permanent body to advise on EU adaptation strategy

Brussels, 04 September 2024 – FERMA reiterates its 2024-2029 policy manifesto proposal for the European Commission to set up an Expert Group on Climate Protection Gaps following the recent release of the EU Climate Resilience Dialogue report on narrowing the climate protection gap and strengthening economic and societal resilience to the effects of climate change.

The Climate Resilience Dialogue report is the result of an 18-month project undertaken by a temporary group of stakeholders set up at the initiative of the European Commission[1]. The report proposes a series of actions, highlights good practices, and explores possible solutions to help reduce the climate protection gap. FERMA and Insurance Europe acted as co-rapporteurs for the 17-strong stakeholder group, which included the World Bank, EIOPA, and the UN Office for Disaster Risk Reduction.

Commenting on the report, Typhaine Beaupérin, CEO, FERMA, said: “FERMA welcomes the opportunity to participate in this transversal initiative within the European Commission. The Climate Resilience Dialogue provides a strong foundation upon which to increase awareness of climate risk, and boost levels of resilience and preparedness across Europe. However, to build on those foundations, and particularly given the speed at which impacts from climate change are being felt across Europe, we must establish a permanent Expert Group on Climate Protection Gaps to put forward policy recommendations for the next EU Adaptation Strategy.”

The report states that: “The participants see merit in building on the work of the Climate Resilience Dialogue to launch follow-up initiatives on the climate protection gap.” FERMA believes the European Commission must bring together a wide range of stakeholders representing expertise across the spectrum of initiatives outlined in the report to be part of the Expert Group with a clear mandate from the Commission.

The report positions risk management and the risk manager function as a central component in efforts to achieve the required levels of climate resilience across Europe.  It states that: “At enterprise-level, a dedicated function of Risk Manager can help to permeate a risk management culture throughout –generally large – organisations”, while also calling for, “the creation of market incentives to invest in risk management solutions.”

Beaupérin added: “The risk management function is critical to helping manage the physical risks resulting from climate change, including the increased frequency and severity of natural hazards. At the enterprise-level, risk managers also play an integral role in enabling the strategic assessment of those risks and the opportunities in their operations across the value chain that can bolster not only resilience but competitiveness in this new era of risk.”

The report further highlights the importance of insurance in narrowing the climate gap, describing it as “one of the key elements of the ‘coping capacity dimension’ of climate risks”. The document proposes the introduction of bundled insurance spanning multiple climate perils which, it states, “could also facilitate a broader spread of risk across hazards and geographic regions”. It also explores the potential for establishing reinsurance pools or public-private partnerships to help “ensure that the risks, costs and responsibilities are clearly shared between the public and private sectors.”

Beaupérin concluded: “The publication of the Climate Resilience Dialogue report is a major achievement and combines the expert input of a wide range of organisations and institutions. It is imperative that we recognise the clear call to action that it provides both at company and European level and take the challenging but necessary steps required to narrow the climate protection gap and ensure that we maintain the momentum that this report has created.”

The Climate Resilience Dialogue report is available here and which includes the list of participating organisations of the Climate Resilience Dialogue.

[1] The initiative was launched by collaboration between the Directorates General for Financial Services (FISMA) and Climate Action (CLIMA).