Responding to the urgent challenges climate change, environmental degradation and energy security are major concerns for society and business today. The transition to a cleaner and more sustainable economy comes with the need to balance immediate economic needs with longer term thinking.
When we speak to ICISA members on the topic of sustainability, there is a growing sense of urgency about the need act today. However, what form solutions take is not always clear. This is a problem that requires innovation and new thinking and ICISA members are actively engaged in finding these answers. In some cases this involves repurposing existing products to support green initiatives, and in other cases, it required the development of new ideas to meet this challenge.
For that reason, ICISA is pleased to have been able to take up a position on the Expert Advisory Board of the Basel Agency for Sustainable Energy (BASE) Energy Savings Insurance (ESI) 2.0 project.
BASE is a Swiss non-profit foundation and Specialized Partner of United Nations Environment which is active around the world in developing market-driven solutions to drive investment in sustainable energy and to meet the challenge of climate change. The ESI model was initially developed by BASE alongside the Inter-American Development Bank in 2015 and implemented first in several Latin American markets.
Following this, it was then implemented in a first phase of European engagement in Italy, Spain and Portugal. ICISA is joining the Expert Advisory Board for the next phase of the model rollout, which has targeted development in Croatia, Greece, and Slovakia. The project has received funding from the European Commission as part of its landmark, Horizon 2020 research and innovation programme, and has also received the support of key government agencies and civil society bodies in the three countries to promote its uptake.
The ESI initiative focuses on driving investment in energy efficiency while overcoming some of the logistical barriers which can slow or limit investment. There are four main components aimed at addressing these:
- A Standardised contract which sets out how energy efficiencies will be achieved and guarantees the committed energy savings;
- Technical validation by a third party to evaluate and validate the expected performance of upgrades;
- Facilitation of financing by linking existing financial institutions and relevant green financial products to business seeking to make such investments in their businesses; and
- A surety bond intended to protect the obligation that upgrades should achieve an intended efficiency gain.
Given the concept includes the use of a surety bond, ICISA’s is pleased to provide input on behalf of our members to the project. Our sector and its potential within such projects is often not well understood. This is why it is important for us to participate in projects that recognise the value of the product and the role it can play in supporting the transition to a greener economy. We hope to support discussions from the perspective of the surety sector and identify solutions to issues that may arise. Our role will also include helping to build connections between different players in the market who may have an interest.
While each individual ICISA member will decide for themselves whether participation in such projects is in line with their business and sustainability strategy, it is important that our sector is part of conversations like this.
Further information about BASE and the ESI 2.0 project can be read on their website. ICISA encourages its members and others in the market to investigate the model in more detail. ICISA will be happy to support engagement with BASE and to input feedback from the industry to help the project advance, including to highlight technical or operational challenges which may arise.