Both climate change itself, but also mitigation and adaptation measures, affect people differently, disproportionately and impose high costs that cannot be borne by the poorer groups in our society. We must therefore aim for systemic changes that are fair and equitable across the board, a so called “Just Transition” (JT).
Investment in the climate finance sector plays a major role in this context, with impact investors increasingly viewing climate investments from an “inclusion” perspective. Thus far, various publications, particularly the G7 Impact Taskforce’s report on Capital Mobilization for Just Transition, have been influential in setting guidelines and strategies for a JT.
The InsuResilience Investment strategy aims to reduce the vulnerability of micro, small, and medium-sized enterprises (MSMEs) and low-income households to extreme weather events. The strategy executes on this objective by supporting development and distribution of insurance solutions that help poor and vulnerable people recover faster in the face of climate-related losses. The strategy reflects the three core pillars of a JT in the following ways:
- Climate action: contributing to climate adaptation through investments that increase climate insurance coverage for poor and vulnerable populations andMSMEs.
- Socio-economic development: reaching specifically vulnerable populations, increasing resilience and security in case of financial stress associated with negative climate events.
- Community voice: considering the specific needs and limitations of end beneficiaries in vulnerable economic segments while developing climate insurance products. Considerable work remains to be done, as asset and impact managers explore the optimal standards, guidelines, and financing structures for an efficient and effective JT. Community voice is a top priority in making JT more effective.
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Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy.
For further information, please contact:
Tahmina Theis
+41 22 596 47 69
tahmina.theis@blueorchard.com
-end-
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