G7 continues work on climate risk insurance and risk financing under the Canadian G7 Presidency

In the run up to the G7 Summit in Charlevoix, the G7 Finance and Development Ministers convened in Whistler to discuss several topics related to the overarching theme of “Investing in growth that works for everyone”, including issues surrounding the management of extreme weather events in developing countries.

Overall, the G7 summit of leaders provides a substantial opportunity for shaping the commitment of industrialized countries and to define their responsibilities vis-à-vis global key challenges. The G7 summit in Elmau, 2015, proved pivotal for establishing an international commitment on providing poor and vulnerable people with insurance cover in order to protect developing countries against extreme climate impacts. It was also essential for organizing much needed political momentum for the Paris Agreement on Climate Change in 2015.

Yet, in 2018 the situation stood in stark contrast to previous summits. In light of swelling conflicts around trade, nationalist and self-interested tendencies re-surfacing across G7 countries, Russia re-turning to the world stage with increasing force, and a US President who withdrew from the Paris Agreement and follows his ‘America First’ agenda, only limited progress was to be expected.

Nevertheless, the Ministerial Meeting on Finance and Development in Whistler a week before the G7 Summit made progress on several issues important to climate risk insurance and disaster risk financing. The discussions were structured around women’s economic empowerment and around innovative financing for development, including mobilizing private capital for sustainable development and building economic resilience against extreme weather events.

The elements below summarize the most important outcomes of the Whistler Summit:

  • Shared understanding that the world’s most vulnerable countries are disproportionally affected by extreme weather events;

  • International financial institutions called on to assess the role of disaster risk insurance coverage and to propose approaches supportive of more gender responsive disaster risk financing mechanisms to help building economic resilience against extreme weather events;

  • Strengthened capacities of public financial management to advance sustainable development in developing countries stressed in the context of mobilizing private capital for sustainable development;

  • Endorsement of the Whistler Principles for Accelerating Innovation for Development Impact to promote, inter alia, the usage of data to drive decision-making, inclusive innovation and smart risk taking;

  • Shared agreement on the importance of financial inclusion, including access to capital and credit, as key enabler of resilience and poverty eradication and on promoting the importance of women’s financial inclusion together with the G20 and others to support women’s economic empowerment;

  • Shared commitment to differently address and reduce humanitarian need, risk and vulnerability to strengthen the resilience and self-reliance of affected populations in context of the Whistler Declaration on Gender Equality and the Empowerment of Women and Girls in Humanitarian Action.