Unwrapping the Risks of Plastic Pollution to the Insurance Industry
Author: Alice Merry for the United Nations Environment Programme
Date: November 2019
Unwrapping the Risks of Plastic Pollution to the Insurance Industry is the first global insurance industry study on managing the risks associated with plastic pollution, marine plastic litter and microplastics.
Plastic is an increasingly high-profile threat to our climate, ocean, wildlife and human health. Its production has increased twenty times since 1964 and almost half of plastic produced is used just once before it is discarded. As a result, plastic pollution is becoming widespread both in the ocean and on land, where it is impacting our ecosystems and threatening lives and human health.
Furthermore, plastics make a direct contribution to climate change. Plastics, which are made from fossil fuels, account for 20% of total oil consumption and their manufacture, recycling and incineration is energy intensive, resulting in high carbon emissions.
Just like climate change-related risks, this study shows that plastic pollution risks can affect insurance and investment portfolios in the form of physical, transition, liability and reputational risks. Risks ranging from threats to human health to evolving liability claims connected to marine litter and plastic pollution should be closely monitored by insurers in coming years.
At the same time, plastic pollution presents significant opportunities for insurers to position themselves on the frontline in tackling this global issue and helping to secure a more sustainable future. Many insurers have committed to promoting economic, social and environmental sustainability. Combatting plastic pollution and supporting shifts towards a circular economy should form an integral part of this.
This study, prepared for United Nations Environment Programme and the Global Partnership on Marine Litter, identifies how risks related to plastic pollution play out across insurance lines and asset classes in which insurers invest. It argues that insurers should take an active role in addressing the risks related to plastic pollution and in contributing to global efforts to reduce it.
The full study can be read here.