Fireman's Fund Presentation
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It Pays to Be Nice Mills College April 10, 2009 Stephen Bushnell Senior Director – Emerging Industries
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Presentation 10Apr2009 to conference "It Pays To Be Nice: Economic Models To Encourage Social & Environmental Responsibility, Center For Socially Responsible Business, Lokey Graduate School of Business, Mills College
Transcript of Fireman's Fund Presentation
It Pays to Be Nice Mills College April 10, 2009Stephen BushnellSenior Director – Emerging Industries
© Copyright Allianz 4/16/2009Filename or other information
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It Pays to Be Nice – Insurance and the Environment
Corporate Social Responsibility is not a new conceptFireman’s Fund founded in 1863 with a social mission to support the fire service
Commitment renewed in 2004 through Heritage ProgramProvides equipment, training and community education programs to fire
departments around the country$20,000,000 in donations by October 2008Examples- Alameda County Fire Chiefs Assn – Fire safety house trailer $55,000- Oakland Ca FD
- CORE public education program $100,000- Rescue equipment $12,000- Hazmat equipment $10,000
© Copyright Allianz 4/16/2009Filename or other information
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It Pays to Be Nice – Insurance and the Environment
Allianz, (Fireman’s Fund Parent) Allianz for Good programMicroInsurance- Allianz offers microinsurance to communities in emerging economies and
developing countries where people are often most vulnerable to risks such as natural disasters, illness and disease, and where there is little or no social security. Microinsurance can help these people to invest in their livelihoods, respond to unforeseen events and plan for their future.
Environmental Management- Being one of the largest global financial services
providers, we know that our operations have an impact on the environment.
Climate Change- Allianz Climate Solutions- WWF Partnership- Climate change Center of Competency
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It Pays to Be Nice – Insurance and the Environment
Fireman’s Fund and Green BuildingsIn 2006 launched the first insurance coverage for Green Buildings
Certified Green Building Coverage- Discount- Broadened coverage to protect investment- Post-loss provisionsGreen Upgrade Coverage- “Green” a building after loss- Post-loss provisionsSustainable practices consulting- Help customers become greener
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It Pays to Be Nice – Insurance and the Environment
What are Green Buildings?
Energy and water efficient
Healthy and occupant friendly
Daylighting
Low carbon footprint
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It Pays to Be Nice – Insurance and the Environment
Commercial Green Buildings are “certified” by two organizations. Both organizations certify buildings based on a set of construction and operational criteria. Both have four levels of certification.
• USGBC •GBI
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Why is the insurance industry interested in Green Buildings?
Profound value proposition; businesses can improve cash flow, operating income and asset value by going green
Green buildings are moving into mainstream
Green buildings are better risks
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It Pays to Be Nice – Insurance and the Environment
Why is the insurance industry interested in Green Buildings?
Property/casualty insurance companies are experts in risk management
Insurance industry has historically taken a leading role in new trends in technology and safety
Customer demand
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Climate change poses tremendous risks to the world, theenvironment, the economy and the insurance industry.Green buildings reduce Greenhouse Gas (GHG)emissions. Allianz/WWF Climate Change Report addressesthis issue in depth.
HurricaneFloodDroughtWild FireChanging weather patterns
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It Pays to Be Nice – Insurance and the Environment
Green Buildings are unique: No trade-offsEnvironment issues often produce winners and losersEveryone wins with green buildings- Profound economic value proposition for building owners- Documented bottom line and employee satisfaction gains- Public- Increased retail sales- Stronger student performance- Environmental benefits- Climate change - Public utilities- Economic stimulus- Companies with real green products
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It Pays to Be Nice – Insurance and the Environment
Economic value propositionBuildings use 40% of US energy, including 70% of US electricity. They generate 38% of all US CO2 emissionsGreen buildings typically use 30% less energy. With alternative power devices can be close to net zeroSignificant energy savings can be realized at no or little cost through proactive facility managementA 30% reduction in energy use results in a 5% increase in NOI (EPA data)Studies document- Higher rents for green space- Faster lease out and higher occupancy rates- Satisfied tenants- Higher resale value
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More economic valueWhen a business reduces energy use by 30% they lower operating costs by $25,000 for every 50,000 sq ft of office space. (EPA 2001)Green buildings use sustainable, recycled and healthy (low VOC) materialsImproved indoor air quality, HVAC systems and daylighting in buildings results in reduced absenteeism and (perhaps) higher productivity
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It Pays to Be Nice – Insurance and the Environment
Public“Energy efficiency measures have enabled California households to redirect expenditures toward other goods and services, creating about 1.5 million FTE jobs with a total payroll of over $45 billion, driven by well documented energy savings of $56 billion from 1972 to 2006.”Dr David Roland-Holst, UC Berkeley, Energy Efficiency, Innovation and Job Creation in California, October 2008
RetailDocumented sales increases in green space (up to 40% increaseWal-mart
Schools and test scoresDocumented increase in student test scores in green buildings
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EnvironmentBuildings use 13.6% of all potable water (15 trillion gallons a year)
Green techniques can reduce water consumption by 50% or more
Buildings generate 38% of all waste in USGreen buildings with a focus on recycling can reduce waste output by 90%
Buildings use 40% of raw materials globallyGreen buildings often use recycled materialsDesigned for efficient material useCradle to cradle philosophy
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Climate ChangeBuildings generate 38% of all US CO2 emissionsEnergy cost to move water- 3,200 kilowatt hours to move an acre of water (approximately 326,000
gallons) from Northern California to Southern California, the equivalence of using 9.8 watt-hours per gallon to move the water.
Alternative energy promise (2030 challenge for net zero)Green materials – concreteSocial and economic costs of climate change
UtilitiesConservation cheaper than new power plantsAvoid desalinization plantsCap and Trade or Carbon Tax
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It Pays to Be Nice – Insurance and the Environment
Economic StimulusGreen savings are reinvested“Energy efficiency measures have enabled California households to redirect expenditures toward other goods and services, creating about 1.5 million FTE jobs with a total payroll of over $45 billion, driven by well documented energy savings of $56 billion from 1972 to 2006.”Dr David Roland-Holst, UC Berkeley, Energy Efficiency, Innovation and Job Creation in California, October 2008
Green jobs and venture capitalObama stimulus plan and budget- Significant investment in energy efficiency and alternative energy
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Real green productsForward looking business see value in green- Greenwashing and the FTCFireman’s Fund and Allianz recognition- GELA, EDF and others- DJ Sustainable index- Financial success- Sincere flattery
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OpportunitiesGreen upgrade of existing buildings
Impact of 30% energy reduction in 4.5 million commercial buildings and 160 million households?
Climate changeEconomyProfitEnvironmentPersonal finances
Impact of water conservation, waste reduction, resource conservation?
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It Pays to Be Nice – Insurance and the Environment
Triple Bottom Line ???Green buildings benefit the bottom line, the occupants of the building and the environment
PeopleProfitPlanet
“Cool” from and environmentalists perspective, simplistic and perhaps naïve from the business point of viewClear that profit includes people and planetSingle bottom line – people, profit and planet are all included in a sustainable dynamic
Not only pays to be nice … it is a new imperative
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Stephen BushnellProduct DirectorCommercial BusinessFireman’s Fund Insurance CompanyNovato, CA
Thank you!
