Can Green Insurance Help the Transition to a Greener Economy?

by Green Jobs Ready on March 23, 2011

There has been much discussion lately about the issue of green insurance. With an increase in global warming influenced disasters it turns out it may be in insurance companies’ best interests to have green based insurance.

Recent reports, like those issued by the UN environmental program, suggest that the amount of insurance damage from climate change related disasters could reach $1 trillion in the next thirty years. Reports such as these have forced insurance companies to consider the benefits of a transition towards a greener economy because they now have an economic stake in its realization. This may be as simple as developing plans of action when major disasters strike to minimize damage, or helping to reduce the onset of climate change by encouraging companies to change their economic standards.

By forcing companies, who the insurance companies operate with, to raise economic standards they could dictate higher standards. These standards could include things as simple as recycling damaged equipment when it can be salvaged. Not only would this benefit the environment, but it would also save the insurance company money in the process. MALK sustainability partners sites a case of an insurance company in Sweden that saved $40 million by encouraging partners to recycle.

On top of this it would help the image of the insurer. They would be seen by those of us interested in a greener society as helping, not hindering, the march toward a green way of life. This would undoubtedly draw interest to the company in a good way.

Since there are clear incentives to make the change towards green insurance then why haven’t more changes been made? Like in most company environments the idea of green implementation is a contentious subject. Many owners and workers at these firms have been taught to despise the green movement that puts constraints on their operating procedures. Because of this they find themselves highly skeptical when they are shown the ways in which the green policies can work in their favor. However this issue is one that will be getting much more attention in the future because of the importance it holds for green jobs and the green movement.

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