What you didn't hear at COP27

The world’s attention has rightly been focused on COP27 and how policymakers and global leaders find and finance solutions to our overheating planet. This year, the debate focused on the issue of “loss and damage” – money paid by developed nations, historically the worst polluters, to help poorer nations on the frontlines of the climate crisis recover from social and economic losses, ranging from catastrophic flood damage to draught-ravaged crops to species extension.

Less prominent in these global climate discussions is the voice of business leaders in emerging and developing nations, particularly those in the global South. A recent survey entitled “Sustainability-Readiness of Business Leaders in Emerging Markets,“ by Allianz seeks to fill this gap by surveying the experiences and sentiments of emerging markets private sector leaders on the state of climate resilience at their organizations. Allianz canvassed C-level managers of mid- to large businesses operating in 14 emerging markets (EMs) across Asia, Africa and Latin America, including local heads of multi-national corporations.

“As a global insurer and a responsible investor and asset manager, Allianz embeds sustainability in our core business to manage risks and capture opportunities – and so do many of our corporate customers. Partnering with our clients in their transition to climate-resilient business models, we wanted to better understand the needs of business leaders in emerging market countries that are most exposed to the risks presented by climate change,” says Christopher Townsend, Member of the Board of Management of Allianz SE. 

Renewable Energy Fuels Growth 

A key finding of the Allianz “Sustainability-Readiness” survey reveals the immediacy of the global energy crisis within EM C-Suites. The energy crisis is seen as impeding their climate agenda and growth, globally and at the company level. An overwhelming majority (67%) of the EM C-Suite business leaders surveyed say that addressing the energy crisis is a more pressing priority than climate change. And 77% say that inflation -- itself largely driven by rising energy costs -- delays the implementation of sustainable measures within their companies.  

Despite the macro headwinds of energy and inflation, the EM private sector remain optimistic and pragmatic about the overall importance of sustainability on their corporate agendas. Respondents see sustainability as adding value. 7 out of 10 say sustainable integration is a key success factor for their company, citing as top reasons cost savings, including energy (57%), regulatory compliance (51%) and brand benefits (50%). The majority are already preparing for climate resilience and the low-carbon transformation, transitioning their businesses. Most (83%) also say that sustainability is becoming a requirement for investors looking to capitalize on emerging market businesses.

The shift to renewable energy is seen as the top priority to facilitate growth globally and on company level, says EM private sector leaders surveyed.  

It also provides tremendous development and investment prospects. According to the latest Allianz Economic Research, the renewable energy transition would not only mitigate climate change but also reduce poverty by increasing labor productivity, agricultural yields, water availability, food security and human health.

Nowhere is this truer than in Africa, which features a promising combination of resources, coastal access, and favorable location, positioning the continent as a potential central hub for the hydrogen-based global economy (hydrogen investments in Nigeria are already set reach USD2bn in 2040). This growth opportunity is explained more deeply by economists at Allianz Economic Research here:  Africa’s journey to net zero: USD7trn just for energy

Collective Effort. Insurers Seen as Ally. 

While shifting to renewable energy and adaptation to physical risks is considered a key task, to date, only 23% of EM business leaders have a net-zero-target in place, while 48% are planning to develop targets in the near future. 

Overall, respondents acknowledge needing support and feel that the responsibility to foster sustainability is a collective one, notably attributing an important role to international companies. The majority see multinational companies (87%), investors (85%), international organisations (85%) and insurers (84%) as positive drivers for more climate protection and social progress. 

Insurers are seen as an ally. Two-thirds of business leaders surveyed feel insurance is important to support organizations with climate change adaption and mitigation (67%) and a real partner in helping businesses be more sustainable (63%). Insurers are expected to apply their services and expertise to provide solutions. Over half think insurers are ahead of regulations when it comes to implementing sustainable business practices (e.g., incentivizing positive behaviours through lower premiums). The EM C-Suite seeks insurers’ support, especially through coverage of small-scale projects (renewables, heating systems, etc.); innovative solutions to tackle social challenges (micro-insurance) and faster claims management in case of natural catastrophes. (See “Related Content” below)   

When it comes to the major drivers of economic growth in emerging countries, Delphine Traoré, Chief Executive Officer of Allianz Africa, believes insurance is often overlooked, despite its role in improving financial stability and mitigating risks. “Expanding Africa’s insurance market and leveraging our industry’s deep climate expertise,” she says, “can facilitate progress towards sustainable business models and generate greater shared prosperity in the region.”    

Related information

Read the full survey findings here:
The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 746 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.8 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of March 31, 2024.
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:
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