Saturday, 16 January 2010

The evolving green insurance revolution

Ever the sceptic when we hear about large companies claiming to have become eco-friendly, we were nevertheless heartened to hear that M&S Money will no longer automatically replace fridges, washing machines and other white goods on a like-for-like basis. Instead it will pay for a model that is rated at least an 'A' for energy efficiency, even if it costs more than the original.

In addition, where significant rebuilding is needed, such as after a fire, the insurance will pay for the work to be done in line with the best environmental standards - the Code for Sustainable Homes Level 4. This can reduce the amount of carbon produced in building and running a home by about half.

Whilst this may be seen as expedience by M&S marketing gurus in recognising and exploiting growing consumer concerns over the environment, it’s an important development when seen in the wider context. That is, it underlines the power of the consumer to force companies to change their policies whilst signalling a growing (albeit sometimes begrudging) willingness by larger companies to take environmental concerns more seriously.

Its clearly only a start since, for example, we still have supermarkets selling products made with palm oil obtained from plantations built on cleared rainforests, selling clothes made by children working under appalling conditions and selling food flown in from across the globe clocking up huge carbon miles. These same supermarkets promote themselves as being eco-friendly with ‘green’ good and services. But with concerted pressure this hypocrisy can be exposed and policies changed.

While M&S Money says its specific green policy features are a first, there are already other environmentally friendly insurance options that can be found throughout the Green Insurance Directory. Many of the companies listed offer discounts on insurance for households that reflect eco-lifestyles, including homes with cavity wall and loft insulation, wind turbines, solar panels, double glazing, energy-efficient appliances and water butts in the garden.

Further, its not only household insurance where the type of policy you buy could make a difference. Several insurers are now running offset schemes where part of the premium goes towards compensating for the amount of CO2 you produce. Co-operative Insurance, for example, runs a carbon offset scheme for all of its motor insurance policies. Projects include planting new forests in Uganda and subsidising people in Madagascar who are purchasing energy-efficient stoves so that they don't need to cut down so many trees for fuel.

Dr. Gary Robertshaw
January 2010

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