Global Governance of the Environment and Implications for the Insurance Industry

The insurance industry has historically had to respond to risks that corresponded to societal developments, changes in industrial practices and international conflict. Existing challenges for business and industry relating to the risks concerning the environment and society represent a new frontier that requires innovation and strategic assessment. However, there is another dimension to the challenges faced by the insurance industry which is often overshadowed by the immediate nature of impacts upon the environment and society. This is that global environmental governance itself is changing, as are the responsibilities that businesses have in relation to human rights. The expectations of the international community relating to human rights and the environment, through corporate law, WTO law and international investment law are all changing in ways that will have major implications for the insurance sector. Therefore, it is arguable that the insurance industry should not only be anticipating physical and commercial risks but engaging more proactively with the processes of change in global governance. The reason for this is due to the pivotal leadership role that the insurance industry can potentially play in the design and development of global governance systems that meet the needs of the international community. This chapter maps out the changes taking place in global governance systems and the important role that the insurance industry can potentially play in those processes.