Bishop Hill Would you want to let this man near your pension?
Jul 27, 2015 Climate: WG3 Greens Mark Wilson, the boss of insurance giant Aviva has been getting in on the climate alarm act, with a speech to a city audience in which he outlined his shock at the horrors ahead and explained what Aviva intends to do about it. The bare bones of the plan can be seen here, and is headed by this summary of Mr Wilson's thinking.
If we do not take urgent action to limit global temperature increases to within 2°C the impacts upon the economy, society, and our business will be nothing short of devastating.
To which the only plausible response is "drivel". I don't think there is a single reputable scientist who would support Mr Wilson's view. The IPCC doesn't think this. Richard Betts, the head of climate impacts at the Met Office doesn't either. The academic literature is clear that the target is a political convenience. Even Ottmar Edenhofer, who came up with the idea of a target has confirmed that view. "Two degrees brings chaos" is mainly the preserve of the wilder fringes of the green movement.
How did Mr Wilson end up thinking such nonsense? Well a longer document setting out Aviva's plans gives hints. There in the acknowledgements we find that Aviva has worked alongside:
Aldersgate Group, Carbon Tracker, CDP, Ceres, Climate Bonds Initiative, ClimateWise, Forum for the Future, Forceful Stewardship programme, Green Alliance, IIGCC, NSFM – Network for Sustainable Financial Markets, PRI, Prince of Wales International Sustainability Unit, ShareAction, Tellus Mater, UKSIF and UNEP (including UNEP-FI and UN PSI) University of Cambridge Institute for Sustainability Leadership, University of Oxford Smith School of Enterprise and the Environment and WWF.
Suddenly his erroneous views on the projected impacts make sense.
When I read all this, I wondered if perhaps I wasn't seeing some rather impressive greenwashing rather than anything more concrete. After all, talk is cheap. However, there are hints in this longer version of the plan that Mr Wilson has already taken concrete steps:
No general insurance for fossil fuels – our general insurance risk appetite excludes providing cover for oil and gas extraction and refining, and large-scale power generation.
Get a load of that! Aviva is going to forgo a century of profits because an alliance of anti-capitalists and crony capitalists has told Mr Wilson that it would be a nice gesture.
And it's not just on the insurance front either:
We will target a £500 million annual investment in low-carbon infrastructure for the next five years...This means more money in renewable energy, such as solar PV, wind and other technologies...
...just as the government starts to kick away the subsidies that are the only thing that keeps it on an even keel. I'm sure investors will be impressed.
But more importantly, the question that must be on everyone's lips is: Why would anyone in their right mind want Aviva running their pension for them?
Reader Comments (58)
Just beam me up NCC...
NCC
You mean Areva surely.
Agreed JamesG; concatenated too far.
PS my comments about the PWR programme are valid; Scotland has no escape from Grid Failure unless it kicks out the businessmen using the SNP as a cover for the rape of the Highlands in the hope of doing the same to the English poor!
David S (above) has hit the nail on the head. The problem lies with giant corporations and how their top executives run the companies which, never let it be forgotten, they do not own - they simply manage on behalf of the shareholders.
They are not necessarily clever people and are rarely cut from the same cloth as the entrepreneurs who found and build those companies. They are all too often prey to the strangest ideas, as Wilson demonstrates.
Sadly, crony capitalism means a relatively small gene pool of these people not only manage the companies but they control their investment strategies.
This is a very serious problem which is at the root of a great many difficulties the world currently faces - politically, socially and economically. Mad politicians are trouble enough - mad heads of companies more powerful than countries are every bit as dangerous.
As a simple person, I have two very simple, but strict rules when it comes to dealing with powerful figures in politics/business.
1. They are smarter (and know more) than me.
2. It's about money.
The reason they are always smarter is that they have an army of advisers and stakeholders watching their every move.
NCC
Really OTT but for the nth time Scotland has zero control over energy policy. If Scotland loses grid power it is 100% due to successive Westminster incompetence since Tory privatisation and abolishment of SSEB/CEGB and England will go lights-out first. It is ironic though that Davey warned Scotland would lose the wind energy subsidies if they voted for independence: Yet another base lie; clearly they were lost either way.
And are these the 200 businessmen you keep banging on about (since you never identify them)?
http://www.heraldscotland.com/news/13177120.200_business_leaders_sign_up_to_say_Yes_to_independence/
Hardly a bunch of Marxists or crony capitalists! Sound, clear-headed businessmen every one!
"We know Scotland will thrive as an independent country, because key economic decisions will be made by those who truly understand and care most about our Scotland's distinctive economic needs, that's the people who live and work here."
Honestly if you really care about Scotland alegedly grabbing English money then you should be happy about the prospect of independence! The truth is that the pound slumped pre-election only because the rest of the world thinks that North Sea Oil is all that the UK has going for it: Heavy industry being just a memory (with what's left getting ready to relocate), banking is utterly corrupt and everyone here seems barking mad.
Bernie1815 and esmiff:
Bernie the answer is, for the time being, that the exposures are not really underwritten. The broker comes in with a list of demands on behalf of the client, and the underwriter capitulates. This is what is called a "soft market" which happens when insurers' results have been good and the supply of capacity outstrips the demand for cover. It continues unabated until the insurers start losing money, then they all panic and push rates up or abandon whole classes of business as uninsurable, creating what is known as a hard market. Their inhouse climate change gurus waffle and scaremonger regardless of what is happening in the real world.
esmiff: don't. Surely you find that the more you know about a subject, the less clever its practitioners turn out to be. One of the joys of insurance is that market behaviour is so predictable. When it comes to teams of advisers, I am reminded of the exchange between the judge and the great F.E.Smith:
Judge: I've listened to you for an hour and I'm none the wiser.
Smith: None the wiser, perhaps, my lord but certainly better informed.
Sounds like superficial claptrap.
Trendy 'finger'on the pulse' commentary from Aviva to impress the bewildered.
Life insurance companies were only too keen to offload their life policy obligations after 2008.
Smarter operators like PHOENIX and RESOLUTION bought these legacy packages for a song.
In 2015 Aviva (late to the party) bought up these companies at a top price.
What does that tell you about Aviva.!