The ClimateWise Principles: Self-Regulating Climate Change Risks in the Insurance Sector

In recent years, the private insurance sector has started to incorporate climate change issues into its standard business practices and even begun to lobby governments to regulate and reduce global greenhouse gas (GHG) emissions. The establishment of the ClimateWise Principles (ClimateWise) in 2007 embodies this effort. ClimateWise is an example of what scholars studying corporate strategy identify as a self-regulatory institution. To date, however, academic scholarship has failed to explain the emergence and function of ClimateWise, a unique initiative designed to leverage the insurance industry's technical and political authority in governing climate change risks. This article will make the case that ClimateWise emerged in response to strategic incentives to reduce exposure to climate change risks, but that the form of this unusual self-regulatory institution was driven by institutional conditions.