Climate Change - ICIEC - The Islamic Corporation for the Insurance of Investment and Export Credit

ICIEC and Climate Change

DRIVING SUSTAINABLE DEVELOPMENT FORWARDS

Overview

At ICIEC, we are acutely aware of the escalating global challenges posed by climate change. Our mission is centered on bridging the finance gap in climate action through our innovative insurance solutions. We are steadfast in our commitment to aiding our 50 Member States as they strive to attain their developmental goals, with a particular focus on resilience, mitigation, and adaptation in response to climate-related challenges.

Recognizing that climate change poses a significant threat to global stability, security, and prosperity, ICIEC prioritizes addressing this critical issue. Our approach is integral to ensuring sustainable development and economic growth, which are at the heart of our organization's mandates. As ICIEC, we understand the importance of a proactive and comprehensive response to the climate crisis.

In our journey towards integrating climate considerations into our operations, ICIEC is dedicated to adapting and evolving our operating model. This transformation is aimed at providing enhanced support to our clients, Member States, and their communities. Our strategy includes adopting new policies and approaches that realign our business model in coherence with the overarching policies and practices of the IsDB Group. This alignment ensures our full integration into the ecosystem and adherence to the Paris Agreement and the MDB Framework Alignment principles.

A critical aspect of our commitment is the promotion of climate change actions and investment initiatives. ICIEC is dedicated to minimizing the environmental impact of our operations, including efforts to offset emissions from travel. This initiative underlines our resolve to be at the forefront of combating climate change and fostering a sustainable future.

ICIEC Climate Change Policy

Purpose and Commitment:

ICIEC Climate Change Policy serves as a guiding beacon, demonstrating our commitment to addressing climate change. We focus on reducing carbon emissions, conserving natural resources, and fostering sustainable economic development.
Support for Member States:

Aiding Member States in meeting their Paris Agreement commitments, especially their Nationally Determined Contributions (NDCs).
Investment and Trade Facilitation:

Focused on promoting investments and trade opportunities that are resilient, emission-reducing, and adaptable to climate change.
Alignment with Islamic Development Bank Group:

Committing to guaranteeing projects and investments that align with the Islamic Development Bank Group's climate action goals, ensuring that our initiatives support a unified approach to tackling climate change.
Collaboration with Financial Institutions:

Engaging with financial institutions to promote and encourage business models and investments that prioritize renewable energy, energy efficiency, and natural capital.

The Climate Change Policy of ICIEC is structured around three key operational objectives and five foundational pillars:

Foundational Pillars:

Internal Operations:

Operationalization of climate change management across ICIEC internal operations focusing on decarbonization initiatives, policies, and plans to manage the organization's own carbon footprint.
Insurance and Reinsurance:

Opportunities for ICIEC to incentivize and contribute to scaling up climate agenda across member countries.
Risk Management:

Approach to climate-related risks in Risk Management.
Contribution to Capacity Building:

Integration of climate change in ICIEC capacity building support and engagement with member states.
Communication:

Development of climate change-specific reporting at the level of the organization and its development impact intervention in member countries.

Operational Objectives:

Support for Member States:

Prioritizing assistance to Member States in their climate change mitigation and adaptation efforts.
Alignment with the Islamic Development Bank Group:

Ensuring our strategies and actions are in harmony with the broader climate objectives of the Islamic Development Bank Group.
Engagement with Financial Institutions:

Actively collaborating with financial institutions to promote investments and practices that are aligned with climate action goals.

Training and Capacity Building

Our approach to climate action starts with knowledge. We are implementing comprehensive training programs and developing a Green Assessment Matrix. The goal is to substantially enhance our team’s understanding and capabilities in addressing climate change. This initiative includes workshops, seminars, and continuous learning opportunities to keep our staff at the forefront of climate knowledge and action.

Business Targets

A significant focus of our strategy is on our business practices. We are dedicated to ensuring that 35% of our total business insured is directed specifically towards climate action initiatives. This ambitious target reflects our commitment to integrating climate considerations into the core of our business operations and decision-making processes.

De-risking Partnerships

Recognizing the importance of collaboration, we are actively engaging with global partners to work on blended climate finance solutions. These partnerships aim to mitigate risks and promote investments in sustainable projects. By leveraging our expertise in risk mitigation, we aim to unlock new opportunities for sustainable development and green investments.

Team Expansion and Reporting

As part of our commitment to enhancing our impact, we are planning to expand our team. This expansion will bring in new talents and perspectives to strengthen our capabilities in climate action. Additionally, we are in the process of preparing ICIEC’s first Sustainability Report. This report will not only showcase our progress and achievements in climate action but also highlight our ongoing commitment to sustainability. It will serve as a transparent communication tool to our stakeholders, detailing our initiatives, impacts, and future goals in sustainability.

Innovative Product Development

We are also focusing on developing innovative insurance and financial products specifically tailored to support climate action. This includes products designed to facilitate investment in renewable energy, energy efficiency projects, and other sustainable initiatives, thereby contributing to the global transition to a low-carbon economy.

Mobilizing Climate Finance

A crucial part of our strategy is to mobilize climate finance. We aim to increase our involvement in projects and initiatives that have a positive impact on the environment, thereby contributing to global efforts to combat climate change.

Research and Development

We are targeting to invest in research and development to stay at the forefront of climate change solutions. This involves exploring new methodologies, technologies, and approaches that can enhance our capacity to support Member States in their climate action endeavors.

Stakeholder Engagement and Collaboration

We are committed to engaging with various stakeholders, including governments, NGOs, and the private sector, to foster a collaborative approach to climate action. This includes participating in dialogues, conferences, and forums focused on climate change and sustainability.

Climate Action Case Studies

ICIEC has been at the forefront of numerous impactful climate action projects

Senegal Solar Streetlamp Project

ICIEC and Standard Chartered signed an EUR 103 million insurance cover, supporting the Senegal government’s initiative to install 50,000 off-grid solar-powered streetlamps in rural areas. This agreement marks a significant stride in renewable energy adoption in Senegal. It aims to improve life quality in rural communities by providing consistent and eco-friendly street lighting, enhancing safety, supporting economic activities, and reducing carbon emissions.

Partnerships and Collaborative Efforts

Joint Initiatives

At the forefront of our climate action efforts, ICIEC has engaged with IRENA's Energy Transition Accelerator Financing (ETAF) platform, highlighting our commitment to global energy transitions and sustainable development. Further amplifying our climate resilience, we have formed key partnerships with the African Finance Corporation (AFC), Global Green Growth Institute (GGGI), General Electric (GE), and the West African Development Bank (BOAD). These collaborations are focused on promoting climate action, advancing green projects, extending training and capacity-building opportunities, and organizing joint seminars and workshops. Additionally, ICIEC has joined the InsuResilience Global Partnership to enhance our strategies in climate disaster risk finance and insurance solutions, reinforcing our position as an industry leader. We have also partnered with "Aware for Projects," an innovative online climate risk screening software, to better identify and assess potential climate change risks, ensuring a consistent approach to sustainability.
Innovative Solutions

The Green Sukuk Insurance Policy is a testament to our innovative approach, facilitating capital for viable green initiatives. Towards a sustainable financial horizon, ICIEC has put forth the idea of a climate-centric fund in collaboration with institutional partners. This proposed fund is poised to offer discounted insurance premiums for financing Climate Action initiatives, especially in the Least Developed Member States. Additionally, ICIEC is dedicated to capacity building; hence, Climate Change training for its staff is set to commence soon.
Regional Focus

We are actively aiding OIC member states in their climate objectives, focusing on both mitigation and adaptation measures.

Future Plans and Vision

Policy and Investment Focus

We aim to continue the development and improvement of policies and guidelines relating to climate change and sustainability.

Sustainable Financial Horizon

Our vision includes the establishment of a climate-centric fund, offering discounted insurance premiums for financing climate action initiatives.

ICIEC at the United Nations Framework Convention on Climate Change Conferences (COP)

ICIEC's active involvement in the United Nations Framework Convention on Climate Change Conferences (COP) reflects its deep commitment to addressing global climate challenges. Since its first participation at **COP22** in Marrakech in 2016, where ICIEC organized a high-profile panel discussion under the theme “ECA Risk Mitigation in Renewable Energy Investments,” the organization has consistently played a pivotal role in these conferences. The panel at COP22 provided a prime platform to highlight the benefits that ICIEC, in collaboration with its partners, extends to Host Countries, Investors, Lenders, and Contractors in renewable energy projects. This event marked the beginning of ICIEC's robust engagement in global climate dialogues.

At **COP26** in Glasgow in 2021, ICIEC's presence further cemented its role as a key player in the climate action sphere. The momentum continued at **COP27** in Sharm El Sheikh in 2022, where ICIEC's participation was not only active but also impactful. The conference saw ICIEC co-organizing three timely side events and three fireside chats, fostering discussions and insights into critical climate issues. A significant highlight was the signing of a Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC), focusing on delivering mark-to-market Climate Action projects in African Member States. This partnership leverages ICIEC’s expertise in de-risking solutions, demonstrating a strong commitment to sustainable development in Africa.

The **COP28** in Dubai, UAE, held on November 30, 2023, was another landmark event for ICIEC. It marked the launch of the groundbreaking Climate Change Policy, a testament to ICIEC’s dedication to mainstreaming the de-rsking of transactions and projects that combat Climate Changeinto its core operations. Furthermore, ICIEC's agreement to join the Energy Transition Accelerator Financing (ETAF) Platform, managed by the International Renewable Energy Agency (IRENA), underscores its proactive approach to supporting energy transition initiatives. The side events hosted by ICIEC at COP28 addressed vital topics in climate finance and mitigation, contributing valuable insights and solutions to the global climate conversation.

Looking ahead to **COP29**, scheduled for November 11-24, 2024, in Azerbaijan, ICIEC is poised for active participation. As the event will be held in one of ICIEC's Member States, it presents a unique opportunity for ICIEC to showcase its initiatives, share its experiences, and further its commitment to climate action on an international stage. The conference will serve as a platform for ICIEC to continue its influential role in shaping global climate policies and strategies, particularly in areas related to renewable energy investments and sustainable development.
ICIEC's involvement in COP29 and beyond is expected to not only reinforce its position as a leader in climate risk mitigation and sustainable finance but also to foster new partnerships and collaborative efforts. The organization's ongoing engagement in these pivotal conferences is a clear indication of its resolve to be at the forefront of global efforts to combat climate change and promote a sustainable future. ICIEC's contributions and insights are anticipated to play a significant role in driving meaningful discussions and actions at COP29 and in shaping the global response to climate challenges.

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