Ceres, a national coalition of investors and environmental groups working to combat climate change, has put out a lengthy study that looks at what the insurance industry is doing — and should be doing – to address climate change. It’s no secret the industry has been pummelled over the last couple of years through a combination of devasting hurricanes and extreme weather, and increasingly insurance companies are realizing that climate change is playing a role. “Climate change poses unprecedented risks to the insurance industry, but it also creates vast opportunities for new products and services to help consumers and businesses reduce their losses, while also reducing the pollution causing global warming,” said Mindy Lubber, president of Ceres, in a statement accompanying the study. “We’ve seen encouraging progress from big-name insurers and brokers since last year’s devasting hurricanes, but many more creative services will be needed as we confront what is perhaps the biggest threat in the industry’s history.”

Examples of some insurance products that are influencing change? The Firemen’s Fund Insurance is launching “green” coverage that offers credits and other incentives to commercial building owners who re-build damaged properties using green and LEED-certified practices. Marsh and AIG have launched carbon emissions credit guarantees that are allowing companies to participate in carbon offset projects. Other are offering discounts for people who buy hybrid cars and install renewable energy in their homes.

I’ve always said that the insurance industry can play a crucial role in the climate change battle, and as standards emerge that allow companies to more accurately account for their emission reductions, we’ll hopefully see more of these green insurance products on the market. Clearly, much more needs to be done. But when you consider this wasn’t even on the industry’s radar screen two years ago, it’s nice to know they’ve taken notice.

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