Accounting environmental factors in insurance costs

An approach to introducing the assessment of environmental risk into financial risk assessment would be to make environmental reporting mandatory, as has recently been done with pension funds in the United Kingdom. New regulations coming into force in July 2000 require pension funds to state their policy on the extent to which social, environmental or ethical considerations are taken into account in the selection, retention and realization of investments.

1. 1. A great number of bankers, insurers and pension funds still seem reluctant to acknowledge and respond to environmental risks as potential financial risks. They believe that environmental and social concerns are irrelevant - or even detrimental - to generating good investment performance.

1. Developing insurance industry

1. Using pay-as-you-drive insurance to reduce vehicle use

1. Removing perverse environmental subsidies