STATEMENT ON CLIMATE CHANGE

At the United Nations Climate Change Conference in Paris in 2015, governments across the globe pledged to address the topic of climate change. A key outcome was the Paris Agreement, which aims to limit global warming to less than 2°C¹ and prevent the dangerous and potentially destructive effects of climate change. AIA welcomes and supports the Paris Agreement as a critically important initiative to safeguarding the well-being of people across the globe, and towards ensuring sustainable and inclusive growth.

The governments in all of our 18 markets have signed the Paris Agreement and developed emission reduction targets to be achieved by 2030. Around the world we have also seen the implementation of more stringent environmental legislation, commitments to greater use of renewable energy, as well as incentives for the development of energy-efficient and low carbon technology.

Against this constantly-evolving backdrop, it is essential that businesses understand the potential impacts on their operations and their role in driving meaningful change within their communities. This Statement outlines AIA’s support for the Paris Agreement and elaborates on the potential climate change implications to our operations.

An effective governance structure allows us to proactively manage external issues that impact our business.

AIA’s Board of Directors retains ultimate responsibility for oversight of the Group’s² risk management activities and monitors material Group-wide risks, whether they are risks relevant to the industry, or unique to the Group and our businesses.

Environment, Social, Governance (ESG) issues including climate change will be discussed, where material, by the Group’s ESG Committee, which includes representation from our Group Executive Committee. The ESG Committee has responsibility to provide further oversight on ESG-related strategies, policies and KPIs and to report regularly to the Group’s Board of Directors.

AIA’s Risk Management Framework also mandates the consistent application of our Risk Management Process across the Group, while our governance structures enable timely identification, assessment, escalation and treatment of risk issues.

A. IMPACTS FROM INCLEMENT WEATHER

The physical effects of climate change in the Asia-Pacific region are far-reaching, with scientific research indicating the potential for fluctuations in rainfall, increases in the frequency and intensity of inclement weather and rising temperatures.

Extreme weather resulting from global warming has the potential to affect health, disrupt business and influence the price and availability of essential commodities such as food and water.

Our role in addressing climate change impacts centres upon the provision of protection and support to communities against diseases linked to weather and any related natural disasters³. In the long term, life and health insurers like AIA have an instrumental role to play through our insurance solutions, which are helping our communities achieve resilience against adverse health or weather-related climate outcomes.

AIA currently offers insurance products that cover climate-related disease⁴, and death and disability that might be caused by weather-related natural disasters such as flooding and landslides.

Climate change risk forms part of our overall insurance risk profile through its role in the frequency and intensity of certain diseases and the health and mortality impacts of natural disasters. We assess the overall level of insurance risk by taking into consideration a range of diverse risk factors varying across the many categories in our product range.

B. IMPACTS TO INVESTMENTS

Climate change impacts extend to the risks and opportunities that arise as our markets de-carbonise and impose new regulation. Implementation of carbon taxes, energy efficiency regulation, or pollution standards may negatively impact the profitability of particular businesses, and thereby investments in these sectors. At the same time, consumer demand and regulation may incentivise the development and advancement of new industry such as renewable energy, electrification and energy storage.

AIA integrates consideration of both climate change impacts and opportunities within our approach to responsible investment. Through our investments, we are able to commit resources to real estate projects that develop and acquire green buildings. This allows us to secure valuable income to address the savings and protection needs of our customers, while providing our markets with energy efficient buildings.

AIA also welcomes the growth of green finance as being essential to facilitating the transition to a greener economy and in achieving the 2°C target. We continue to explore opportunities for responsible investment and robust ESG screening practices throughout our investments.

Addressing climate change requires collective action by governments, businesses and individuals alike. Since 2015, AIA has taken the initiative to measure and monitor our environmental footprint across markets where we maintain operational control, reporting on our emissions and energy performance in our ESG Report.

As key to our support of the Paris Agreement, AIA will explore the development of both emission and energy targets for the year 2030.

This Statement will be reviewed annually or as required to ensure its relevance and effectiveness, including with respect to any charters or policies that AIA may choose to sign or adhere to. 

If you have questions on this document, please contact our ESG team at esg@aia.com.

¹Compared to average temperatures prior to industrialization

²AIA has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, Cambodia, a 97 per cent subsidiary in Sri Lanka, a 49 per cent interest in our joint venture in India and a representative office in Myanmar

³Please refer to the Operating Responsibly section of AIA’s ESG Report on how this is addressed

⁴Climate change has been linked to increases in prevalence of communicable vector borne diseases such as dengue and foot and mouth disease. Research has also shown linkages between rising temperatures and non-communicable diseases such as heart and lung disease.