March 18, 2013

Leading health insurers in addressing climate change

Kaiser Permanente has taken the lead among health insurers in addressing climate change, according to a new report from the Ceres, a Boston-based non-profit that promotes eco-minded business practices.

In its report, Ceres ranked 184 insurance companies for their climate risk disclosure and climate risk management. Out of those insurance companies surveyed, Kaiser Permanente was the only health insurance company to earn a spot in the report’s top 10. “Only one health insurer, Kaiser Permanente, has a strong climate position,” the report states.

As part of its ongoing commitment to improve the health of the communities it serves, Kaiser Permanente rolled out an aggressive strategy last year to reduce its overall greenhouse gas emissions by 30 percent by 2020, compared to its 2008 levels. The strategy includes plans to expand upon the organization’s current on-site solar and fuel cell energy initiatives while also targeting energy conservation measures.

“If greenhouse gas emissions continue to increase, climate change will cause health effects that will directly impact Kaiser Permanente’s ability to fulfill its promise of quality, affordable care,” said Kathy Gerwig, Kaiser Permanente’s vice president for Employee Safety, Health and Wellness and environmental stewardship officer. “It’s clear we need to be prepared because global climate instability will increase the demand for health care.”

The Ceres report stresses that few health insurers are currently focused on climate change. “Despite predictions of more pronounced heat waves, expansion of insect-borne disease and poorer air and water quality, few health companies describe climate change as a factor relevant to their risk assessment,” the report states.

In response to the potential threats from climate change, Kaiser Permanente has adopted a climate-change strategy that features five broad principles: to understand climate change; assess and avoid climate-related impacts; commit to continuous improvement; support industry standards; and inform public policies.

By reducing its reliance on fossil fuels and trimming overall energy consumption, Kaiser Permanente expects to minimize its greenhouse gas emissions, which are known contributors to climate change and the rise of pollution and disease.

The report comes as weather-related disasters cost an estimated $100 billion in damages last year. The U.S. government’s latest National Climate Assessment says climate change increases the risks and severity of heat waves, downpours, droughts and wildfires, as well as the intensity of hurricanes.

The Ceres report’s findings are based on responses by insurers doing at least $300 million worth of business in California, New York and Washington — states that mandate they participate in a survey to disclose their plans. Ceres evaluated the companies for how seriously they study climate-related risks and take steps to reduce them, such as lowering their own and their clients' energy use and greenhouse gas emissions.

The report recommends that insurance companies:

  • Treat climate change as a corporate-wide strategic issue, affecting all functions, at all levels, and formalize this in a public corporate policy statement.
  • Assess how a warming climate will alter extreme weather events, disease vectors, political risk and infrastructure resilience, and implement strategies to adapt their underwriting and investment practices accordingly.
  • Develop catastrophic models that anticipate the probable effects of climate change on extreme weather events.
  • Advocate for public policies that will help reduce carbon emissions and maintain an economy that is resilient to climate risk.