Q&A Rob Wyse
What impact does Zurich have on the global climate? How might
climate change affect our business? How will we mitigate the risks
and avail of the opportunities climate change presents? These are
the issues Climate and Nature Manager Rob Wyse has grappled with in
recent years. He is responsible for the Group level scenario-based
climate risk assessment process, central to Zurich’s implementation
of the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD).
Why was Zurich keen to align with TCFD as quickly as
possible?
We see climate change as one of the most complex and urgent risks
facing society. It is also a driver for many of the other risks that
we as a global insurer need to manage so it is vital that we have a
strong understanding of potential future impacts. Equally, the
transition to a low-carbon economy is a 'once in a lifetime' event.
We need to ensure we are well positioned to benefit from the
opportunities it presents.
Transparent, comprehensive and accurate external disclosure is
essential to facilitate the low-carbon transition. It is important
to us as a responsible company that we demonstrate the behaviors we
expect of our customers, peers and other economic actors.
How has the reporting evolved over the past five years?
We have reported in line with the TCFD since it first published its
recommendations in 2017. Over the years our disclosures have become
increasingly more granular and detailed as our understanding of this
risk strengthens. In 2021 and in line with TCFD recommendations, we
performed our first scenario-based climate risk assessment of both
underwriting and investment portfolios as well as our operations.
What were the biggest challenges?
There have been many, but perhaps the forward-looking scenario-based
analysis was the biggest challenge. The relative immaturity of
assessment methodologies and modelling capabilities for underwriting
activities was a particular difficulty to overcome.
The quality of forward-looking analysis relies on the availability
of comprehensive, consistent high-quality data relating not only to
emissions but also to private sector climate commitments.
Finally, implementing these recommendations demands co-ordinated
action across all areas of the business, something that can be
resource and time intense.
How has Zurich benefited from TCFD reporting?
As a report preparer, implementing the recommendations of the TCFD
has proved immensely valuable in increasing our understanding of how
climate change could impact our business over time. Through dialogue
with subject matter experts, the nuances of scenario analysis model
outputs can be explored, leading to a more accurate and consistent
understanding of potential impacts. Scenario analysis also helps to
contextualise actions our first line business functions can take in
the short term to address potential long-term impacts.
As a report user, clear and comprehensive disclosures can serve as a
useful tool for engaging with customers to understand their
strategies for decarbonization.
What personal lessons have you learnt from TCFD?
I would encourage against viewing TCFD as a burdensome exercise.
Embrace the inherent value in understanding the climate related
risks and opportunities your organization faces. But equally so,
don’t underestimate the effort that may be required to achieve a
good level of insight. I’ve also learned that it’s more important to
ensure that your forward-looking assessment is accurate than get
distracted with precision. Don’t let the uncertainty inhibit your
efforts.
