The Nigerian Insurers Association (NIA) has said it will evolve a stand-alone flood insurance to mitigate economic losses incurred during flood incidents in the country.

Mr Soji Oni, Chairman, Fire Offices Committee (FOC) of the association, made the disclosure recently in Lagos.

Oni noted that the policy was necessitated by the increasing number of flood victims, economic loss and the constrained sustainable development caused by flood incidents within the country.

According to him, the insurance industry paid billions of naira as compensation to policyholders during the 2009 and 2012 flood incidents.

“Prior 2009, flood was not a threat to us but we have discovered now that what we ignored in the past has become a major threat to us in the country.

“Now, megacities and communities are at risk; we have massive damage done by flood to properties, increased economic loss and a whole lot of displaced people.

“As an industry, we are trying to align with global best practices where flood insurance is a stand-alone policy and given more consideration now that it threatens us.

“When it becomes a stand-alone policy, it becomes mandatory, gains more public awareness and reduces risk of the policy holders,” Oni said.

According to him, the Governing Council of the association is working assiduously to fast-track the policy in a bid to effectively discharge its obligation of protecting against risk hazards.

“When disaster occurs in Nigeria, the victims usually look up to the government, philanthropist and their relatives for help.

“Most people are burdened by relocation or cost of rebuilding their properties but with this policy, you have something to fall upon even as a tenant,” he said.

Oni said that the initiative would strengthen and equip the industry to provide cover that could reduce impact of environmental risk on the citizens. He emphasised that the insurance payouts would also accelerate economic recovery while reducing reliance of flood victims on limited government’s disaster aid.

Presently, flood is covered under Fire and Special Peril insurance in Nigeria.

By Funke Ishola

Global corporations have begun the transition to a low-carbon economy and some are already capitalising on the opportunities this affords, whilst a large number risk being left behind through lack of long-term planning and inertia, according to analysis released on Tuesday by CDP, the not-for-profit global environmental data platform.

CDP’s report, “Out of the starting blocks: Tracking progress on corporate climate action”, produced in partnership with We Mean Business, presents carbon emissions and climate change mitigation data from 1,089 companies, disclosed to CDP at the request of 827 institutional investors with assets of $100 trillion. These companies – which represent some of the world’s most significant in terms of market capitalisation and environmental impact – account for 12% of total global greenhouse gas emissions.

With entry into force of the Paris Agreement on climate change confirming the shift to a low-carbon economy, CDP will show how business action is stacking up against the world’s new climate goals by tracking this group of companies in subsequent annual reports.

This year’s report, which sets the baseline, shows that the low-carbon transition can bring high returns. Over a five-year period, 62 companies have succeeded in cutting their emissions by 10% or more while increasing their revenue by the same margin. Collectively, revenue has increased by 29% and emissions reduced by 26% amongst this group, while the rest of the companies in the sample saw a 6% decrease in revenue alongside a 6% rise in emissions.

The group includes:

• Host Hotels & Resorts Inc. The US real estate company saw revenue growth of 22% over five years alongside a 23% drop in emissions, with overall emissions intensity falling by 37%. The company has a science based target in place to reduce its scope 1 and 2 emissions on an emissions-per-square-foot basis 28% by 2020 from a 2008 base-year;
• SCA: The Swedish consumer goods company and pulp and paper manufacturer reduced its emissions by 32% while increasing revenue by 19%, achieving a 42% drop in emissions intensity. The company is reducing annual costs by €5 million thanks to a new biofuel-powered kiln at one of its mills;
• Wipro: The Indian IT company saw growth of 15% over a five-year period alongside a 24% drop in emissions, with overall emissions intensity falling by 33%. The company has introduced new virtualisation technologies across its servers, resulting in huge annual energy savings.

Companies are one of the key actors in enabling the global economy to achieve its climate goals and the report reveals that 85% of businesses already have at least one target in place to reduce their greenhouse gas emissions. However, these targets are lacking in long-term ambition, with just 14% of companies having set goals for 2030 or beyond. Moreover, just a small proportion of companies in the sample (9%) have committed to aligning their targets with the latest climate science for a 2˚C pathway.

Achieving their current targets would take the companies in the sample one quarter of the way to the level that their emissions should drop to in order to be consistent with keeping global warming below 2 degrees.

CDP’s chief executive officer, Paul Simpson, says: “This baseline-setting report uses data related to companies’ activities pre-Paris Agreement; it shows that while many are already on the right path, there is still a large gap to close. With hundreds of companies already disclosing to CDP that they anticipate substantive changes to their business resulting from the Paris deal, we expect to see a shift to longer-term, more science-based targets in future years.”

“As investors look to reduce risk by shifting investments to less carbon intensive infrastructure, the spotlight will shine more intensely on corporate actions. There is still all to play for in the race to seize the opportunities from this transition.”

We Mean Business’ chief executive officer, Nigel Topping, said: “We Mean Business is delighted to partner with CDP on this report, that sets the baseline for corporate action to combat climate change. We know that global business is instrumental in creating a below 2˚C world; this report shows that some companies are already reaping the business benefits of early action on climate.

“Future editions of this report will be the tool for the We Mean Business coalition to track how companies are capitalising on the low-carbon transition, and bringing the global economy ever closer to its climate goals.”

Some of the largest companies in the world by market capitalisation are notably absent from the analysis, having declined to respond to CDP’s investor-backed disclosure request. CDP will track a group of over 700 non-disclosing companies to monitor if they begin to engage with the process in future years and help investors assess their exposure to unrevealed risk. The three biggest companies by market capitalisation that failed to disclose this year are Berkshire Hathaway, Facebook and Amazon.

With the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD) due to publish its recommendations for consultation later this year, pressure on companies to disclose how climate change is likely to impact their business is expected to grow.

Alongside the report, CDP launches its 2016 Climate A List which comprises those companies identified as A grade for their actions in the 2015 reporting year to mitigate climate change. Following an independent assessment against CDP’s scoring methodology, 193 companies have made the list, which features brands from around the world such as Colgate Palmolive Company, Sony and Wipro.

Moody’s Investors Service says that global green bonds volume reached another peak during the three months ended September 30, with the strongest quarterly issuance yet of $26.1 billion, while the amount for all of 2016 could rise to over $80 billion.

“The volume for the third quarter pushed green bond issuance for the first nine months of the year to $63.2 billion, an increase of 132% from the $27.2 billion issued a year ago,” says Henry Shilling, a Moody’s Senior Vice President. “Moreover, volume for the first nine months also strongly eclipsed the total of $42.4 billion issued during all of 2015, which was previously the record for annual green bond issuance.”

“Should the issuance levels seen in the third quarter be sustained through the end of the year, which is likely, given early issuance indicators during the first three weeks of the fourth quarter, the global market stands ready to achieve well over $80 billion in issuance and may approach $100 billion for the year,” says Shilling.

In addition, although renewable energy and energy efficiency remain projects of choice, the value of third-quarter issuance dropped in these categories to below 50%. By contrast, allocations to clean transportation, waste management, sustainable waste management and clean water and/or drinking water ticked up, strongly diversifying use of proceeds in the third quarter.

Moody’s conclusions were contained in its just-released quarterly report on green bond issuance, “Green Bonds – Global Record Quarterly Issuance Again in Q3 2016; Full Year Poised to Exceed $80 Billion”.

Benefiting from robust offerings from Chinese financial institutions in particular, full-year issuance could exceed $80 billion and, in doing so, would be within striking distance of doubling issuance in one year that was otherwise achieved over a period of the previous nine years, according to Moody’s.

While still small in absolute terms, this development reinforces a signaling of an acceleration in the momentum of a trend to acknowledge and address climate change that is also echoed in the speed with which the Paris Agreement on climate change went into force.

Significant issuance from Chinese banks marked a return of the pattern observed in the first quarter of 2016 and contributed to China accounting for 44% of global issuance. Financial institutions more generally contributed to 48% of issuance. Beyond China, supranationals and Mexico ranked second and third with 16% and 8% of global issuance, respectively.

During the third quarter, the number of issuers and transactions declined slightly, while the average transaction size increased. A total of 50 distinct issuers came to market with 77 transactions, a slight decline from the second quarter’s 54 issuers and 81 transactions. Average transaction size increased during the third quarter, averaging approximately $337 million per transaction.

The credit quality of green bonds also fell entirely within the investment-grade category. Ratings were distributed across the range, with 33% rated Aaa, 3.8% rated Aa1- Aa3, 42% rated A1-A3 and 21.6% rated Baa1. None of the issuances rated by Moody’s fell into the non-investment grade space.