Top insurance expert warns of massive fallout from growing financial storm: 'There is only one path forward'

A member of the board of directors for Allianz, one of the world's top insurance companies, issued a warning about the risks that industries face because of climate change — and it may be the strong message needed to motivate corporations to reduce pollution.

Günther Thallinger, an Allianz board member, wrote on LinkedIn that climate change poses "direct physical risks to all categories of human-owned assets—land, houses, roads, power lines, railways, ports, and factories."

"There is only one path forward: prevent any further increase in atmospheric energy levels," he added. "That means keeping emissions out of the atmosphere. That means burning less carbon or capturing it at the point of combustion. These are the only two levers. Everything else is delay or distraction."

At a time when environmental, social, and governance investments are taking a hit, it is promising that some executives are emphasizing the importance of sustainability efforts for businesses.

Thallinger warned that worsening climate change will make it impossible for economies to adapt. It is increasingly difficult to manage the risk of damages caused by extreme weather events. Many homeowners are already struggling to recover from natural disasters.

He urged businesses to take climate change seriously because many regions "are becoming uninsurable." Losing insurance would be "catastrophic" to the financial sector and consumers, according to Thallinger.

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"A house that cannot be insured cannot be mortgaged," he wrote. "No bank will issue loans for uninsurable property. Credit markets freeze. This is a climate-induced credit crunch."

Allianz is better than many insurance companies when it comes to keeping pollution out of the atmosphere in an effort to slow the warming of the planet. It has committed to not insuring new oil and gas fields, which are increasingly risky investments, according to The Bureau of Investigative Journalism. As the pool of insurers shrinks for these dirty energy projects, the cost of insurance rises and makes them unviable.

Still, Allianz can do more to curb pollution and further advance its sustainability goals. The Bureau of Investigative Journalism found that some of the company's asset management firms had investments in dirty energy projects. So while Allianz has said it is taking steps to address climate change, it has a ways to go.

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