Butch Bacani created and leads UN Environment Programme's Principles for Sustainable Insurance Initiative (PSI), the largest collaboration between the UN and the insurance industry. It acts as a framework and initiative for the industry to address sustainability issues — as risk managers, insurers and investors — and to build resilient, inclusive and sustainable communities and economies.
He leads activities supporting the UN Sustainable Development Goals, Paris Agreement on Climate Change, and the Financial Stability Board's climate risk disclosure recommendations (TCFD).
He co-led the development of the first global sustainability guide for the insurance business, led the creation of the Insurance Industry Development Goals for Cities, forged the PSI's partnership with the world's inclusive insurance community, and co-led the creation of UNEP's Sustainable Insurance Forum for supervisors and regulators.
Butch is also involved in the InsuResilience Global Partnership, Vulnerable 20 Group of Finance Ministers, Sustainable Blue Economy Finance Initiative, California Climate Insurance Working Group, Insurance Development Forum, and Microinsurance Network.
What inspired you to work on climate change issues?
I'm from the Philippines, one of the most biologically diverse countries, and situated in the Coral Triangle — the global centre of marine biodiversity.
But the Philippines is highly vulnerable to the impacts of climate change. I grew up in a country that was once one of the most prosperous nations in the Asia-Pacific, but then suffered from political instability, economic decline, human rights violations, social inequality and environmental degradation for many years. In short, I had direct experiences with many sustainability issues.
With a career in the insurance industry and as an avid scuba diver, I wanted to use my professional experience and passion for sustainability to tackle global sustainable development challenges, without turning my back on my country.
What are your work priorities right now?
The PSI has convened over 20 insurers for a project to pilot the recommendations of the TCFD. The project covers physical, transition and liability risks in the context of insurance portfolios and focuses on the most challenging TCFD recommendations, particularly integrating forward-looking scenario analysis into climate risk assessment.
The final report will be produced by the end of this year and I believe it will send a strong market signal that will advance climate risk assessment and TCFD implementation.
Furthermore, the PSI is now shaping an initiative to develop "Insurance Sustainable Development Goals". Many insurance products and solutions already support the UN Sustainable Development Goals (SDGs) but the industry lacks a systematic way of mapping them, a clear narrative, and methods to measure impact.
There is also a lack of understanding on the types of insurance products and solutions needed to support various SDGs, and how they can be developed and brought to scale. And there are no global goals or targets for the insurance industry linking its insurance portfolios to the SDGs.
Finally, our collaborative efforts with insurance regulators and supervisors is also important. For example, we're working with the California Insurance Commissioner to develop a California Sustainable Insurance Roadmap, which would be the first of its kind in the world.
Tell me one step the insurance industry needs to take, to improve its response to climate change?
I'll give you two. First, implement the TCFD recommendations across insurance and investment activities. Second, decarbonise insurance and investment portfolios and steer them in a way that they are aligned with the aims of the Paris Agreement and the SDGs.
Are you optimistic or pessimistic we can avoid the worst effects of climate change?
Optimistic. While the 2018 IPCC report highlights the rapid, far-reaching and unprecedented changes needed to limit global warming to 1.5°C, it also means that we could still achieve that goal. But that window will not be open forever, and the clock is ticking. So we need real leadership, ambitious and urgent action, radical collaboration and stubborn optimism at all levels of society.
What are you doing personally to reduce your climate impact?
I live car-free. I walk to do most errands, bike to work, and take public transportation if walking or biking is impractical. I live in a small flat that uses renewable energy.
My diet is mainly focused on grains, vegetables, fruits and sustainable seafood. I use reusable bags for groceries and wear many clothes that I've had for years. I strive to reduce consumption and waste and recycle and upcycle as much as possible. Most recently, I upcycled some of my old jeans and they've now become my baby daughter's very cool playmat!