Jason Thistlethwaite

The ClimateWise Principles Self-Regulating Climate Change Risks in the Insurance Sector

In recent years, the private insurance sector has started to incorporate climate change issues into its standard business practices and even begun to lobby governments to regulate and reduce global greenhouse gas (GHG) emissions. The establishment of the ClimateWise Principles (ClimateWise) in 2007 embodies this effort. ClimateWise is an example of what scholars studying corporate strategy identify as a self-regulatory institution. To date, however, academic scholarship has failed to explain the emergence and function of ClimateWise, a unique initiative designed to leverage the insurance industry’s technical and political authority in governing climate change risks. This article will make the case that ClimateWise emerged in response to strategic incentives to reduce exposure to climate change risks, but that the form of this unusual self-regulatory institution was driven by institutional conditions.

The politics of experimentation in climate change risk reporting: the emergence of the Climate Disclosure Standards Board (CDSB)

The use of accounting expertise to shape voluntary sustainability reporting has been interpreted as an implicit form of ‘financialization’ whereby technical debates that promote profit maximization are privileged over corporate accountability. Research has yet to assess empirically how accounting expertise is deployed as a ‘public practice’ to influence sustainability reporting. To address this gap, I explore the emergence of the Climate Disclosure Standards Board (CDSB), and the way it uses accounting expertise to shape climate change risk reporting. While it is clear that professional accountants are playing a more significant role in risk disclosure, the CDSB is a form of ‘experimental governance’ that exposes accounting expertise to uncertainty and contestation. Indeed, the CDSB reconstitutes a ‘public space’ within the field of accounting where the link between accounting standards and sustainability reporting is exposed to environmental politics rather than subverted into market-friendly debate.

Private governance and sustainable finance

The use of private environmental governance (PEG) represents a unique strategy designed to help generate political authority for sustainable financial practices. Several collaborations between financial firms and environmental non-governmental organizations, including the Carbon Disclosure Project, Investor Network on Climate Risk and Climate Disclosure Standards Board, have embraced PEG to improve the financial disclosure of climate change risks within financial markets. How does this strategy use sustainable financial practices in ways that generate authority? This paper argues that PEG helps deploy technical knowledge in ways that cultivate support among politically influential constituencies for the adoption of sustainable financial practices. To make this conclusion, the paper will borrow from Global Environmental Politics and International Political Economy research on the use of private governance as a mechanism that steers and coordinates behavior. This focus on private governance helps address an important gap within sustainable finance research on the link between technical practices that reduce environmental externalities and political authority.

Private governance and accounting for sustainability networks

Accounting rules and practices have become an important component of the governance of sustainability, notably in the field of corporate environmental, social, and governance reporting. This paper analyses the emergence and character of private governance initiatives regarding sustainability accounting. It does so using social network analysis in order to be able to conceptualize the patterns of connection across these different initiatives, and thus contribute to three specific ways that these initiatives are understood theoretically—as privatized neoliberal governance, via notions of professional epistemic authority, and through the concept of experimentation and experimental governance.

Flood risk management and shared responsibility: Exploring Canadian public attitudes and expectations

Funding information Social Sciences and Humanities Research Council of Canada, Grant/Award Number: 430-2015-00521 One of the central tenets of the flood risk management (FRM) paradigm is that responsibility for flood mitigation and recovery must be shared with stakeholders other than governments, including property-owners themselves. However, existing research suggests that this imperative is unlikely to be effective unless propertyowners demonstrate a sense of personal responsibility and are willing to undertake protective behaviours. In Canada, several recent policy changes have effectively transferred more responsibility to homeowners, but it is unclear whether Canadians are ready to accept this obligation. This article presents results from a national survey of Canadians living in high-risk flood areas, which probed their attitudes concerning the division of responsibility for flood mitigation and recovery among governments, insurers and homeowners, as well as their willingness to adopt protective behaviours. The survey, which received 2,300 responses from all 10 provinces, indicates that Canadians are willing to accept some responsibility, but for most this perceived responsibility is insufficient to influence their decisions on mitigation and recovery. Governments in Canada could learn from jurisdictions that have addressed this disconnect through policies designed to improve awareness of FRM among property-owners.

Application of re/insurance models to estimate increases in flood risk due to climate change

BackgroundFloods are the most common and most expensive natural hazard, and they are expected to become more frequent as the climate changes. This article presents research that used re/insurance catastrophe models to estimate the influence of climate change on flood-related losses. The geographic focus of the study was the Canadian Maritimes—specifically Halifax, Nova Scotia—and it sought to determine how municipal risks due to rainfall-driven riverine floods could change as a result of climate change.ResultsFindings show that annual flood losses could increase by up to 300% under a business-as-usual climate scenario by the end of the century (i.e., no mitigation or adaptation), even without accounting for changes to the built environment that could increase exposure (e.g., no population or economic growth).ConclusionsIncreasing flood risk demands an open discussion about how much risk is acceptable to the community and what controls on further growth of exposure are necessary. Moreover, projected increases in flood losses put into question long-term insurability in the Halifax area, and highlight a broader problem facing manyother areas in Canada as well.

Insurance and Climate Change Risk Management: Rescaling to Look Beyond the Horizon: Insurance and Climate Change Risk Management

Climate change represents a significant financial risk to the insurance industry, but research has yet to assess whether the industry is managing this risk. Through the application of scale as a vertically nested hierarchy of relationships, this paper seeks to evaluate whether insurers are ‘rescaling’ risk management practices to accommodate the temporal and spatial uncertainty associated with climate change. This framework is applied to a content analysis of 178 (183) firm responses to the 2012 (2015) U.S. National Association of Insurance Commissioners Climate Risk Disclosure Survey to detect evidence of rescaling through climate change risk management (CCRM). The results reveal that the majority of companies do not integrate climate change into their risk management practices, but reinsurers are rescaling in a greater proportion than primary insurers. This finding confirms that a nested spatial and temporal scale in the insurance industry creates resistance to CCRM. The use of scale contributes to emerging scholarship on organizations and climate change by offering a framework for measuring organizational responses and justifying a research agenda on rescaling strategies as a means of risk management.