The start of the year is always a time for reflection. A moment when many of us look back at what has passed and consider what might be around the corner.
With that in mind, as I write this roundup of the past month, I find myself cast back to this time last year, when I was preparing the Climate and Sustainability alert for January 2025. My key focus then was the return of Donald Trump as US president.
Trump's return raised pivotal questions about the future of environmental, social and governance (ESG) efforts. One year on, the answers to many of those questions are, perhaps, not surprising. The "drill, baby, drill" president has led insurers – particularly those with large US exposure – to noticeably soften or quieten their pro-sustainability messaging.
In addition, in a start to the year marked by major geopolitical interventions, the US president also has an uncanny ability to draw attention away from climate issues, as people become more concerned with war and global instability.
Other topics, such as artificial intelligence and the cost-of-living crisis, also appear to be competing for attention, potentially pushing climate down the list of public priorities.
But big industry players are still speaking loudly, albeit increasingly under the banner of climate resilience and transition, rather than the prior emphasis on cutting greenhouse gas emissions.
For example, this month, one year on from the Los Angeles wildfires, Moody's said it has seen significant advances in managing the systemic risks associated with wildfires in the US state. This includes regulatory frameworks evolving to incorporate forward-looking models, mitigation programmes being expanded and insurers adjusting underwriting practices to better reflect urban conflagration risks.
That said, consumer groups and sustainability advocates have highlighted the need for more urgency in addressing climate risk, particularly by ceasing fossil fuel insurance, not only to improve resilience but to reduce the underlying risks, especially in US homeowners' lines.
We have also seen fresh warnings at the start of this year from major firms about the scale of natural catastrophe losses. Munich Re noted that, while insured losses were down on last year, 2025 was still the costliest claims year on record for so-called "non-peak" perils.
Munich Re said the fact that losses were not even higher was down to "sheer luck" and described the impact of climate change as alarming – echoing the words used by the German insurance association.
Meanwhile Scor has warned of the impacts of climate change on life and health and risks and Oak Global has said that climate change is outpacing traditional insurance structures, unless innovation accelerates.
Accordingly, we have already seen fresh solutions emerge, such as US non-profit InnSure launching a climate risk solutions incubator platform.
Meanwhile, the UK regulators' Climate Financial Risk Forum has developed a free online Climate Scenario Analysis Narrative tool to help financial institutions better understand and explain future climate impacts.
On the regulatory front, European supervisory bodies have launched new guidance on ESG stress testing, while consulting firm Crowe has launched a market flash survey on how insurers are preparing for the Prudential Regulation Authority's tougher climate risk rules.
So, while the political noise may be pulling attention elsewhere, the climate risk story is only getting louder, whether the industry likes it or not. With natural catastrophes continuing to grab headlines, the pressure to adapt is only intensifying.