Mother Nature has the answer

Munich Re and ERGO make an active contribution to climate protection by supporting ecosystem-based adaptation initiatives.


Tackling climate change together – doing something for the climate and for society

Our climate is changing. We are all feeling the consequences of extreme weather events; heatwaves, droughts, heavy rainfall and severe cyclones, and more frequently. Yet it is often the case that those who suffer the most from extreme weather are those who already live in difficult economic circumstances. With their Social Impact Project, Tackling climate change together (TCCT), Munich Re and ERGO are supporting initiatives that help to mitigate the consequences of weather-related natural catastrophes or show people how they can adapt to climate change.

We do not just provide expertise and experience, but also the financial means. TCCT is pursuing two paths: together with EIT Climate-KIC, the largest public-private climate initiative from the European Union, TCCT is helping new companies to develop climate protection solutions. We will soon be reporting on the latest call for applications to the Accelerator programme, and on the winning ideas. TCCT also supports projects that carry out so-called ecosystem-based adaptation initiatives. This involves maintaining, sustainably using, and regenerating ecosystems to limit the regional effects of climate change, and to ensure a basis of existence for the people affected in the area. Examples include reforestation or restoring coral reefs to protect the coast.

The consequences of climate change are already affecting our customers and our business today. This makes it all the more important for us to make a sustainable contribution to climate protection in our social commitment. That is why we are focusing on the long-term effect of reforestation and the strengthening of entire ecosystems in key regions, and we support young entrepreneurs with climate-friendly business ideas.
Oliver Zilcher, responsible Division Manager at ERGO

Protecting communities and the economy in the Mekong Delta

Two new projects will be started as part of the ecosystem-based adaptation initiatives. Together with the GIZ (German agency for international cooperation, GIZ GmbH), TCCT started a project that aims to reforest mangrove forests in the Mekong Delta in Vietnam. Mangroves can store up to three to five times more carbon dioxide than tropical forests, storing it underwater and below ground as long as the forests remain intact, thereby making an important contribution to climate protection. With around 18 million inhabitants, the Mekong Delta is one of the most important economic regions in Vietnam. It is the third-largest industrial region, with high growth rates and a fast-developing infrastructure. The Mekong Delta is also Vietnam’s most significant farming region; 55% of the country’s rice production come from the Delta. The locals’ very existence and the emerging economy are under acute threat from storms, floods and the resulting erosion of the coast. The mangrove forest ecosystem is crucial to protecting the Mekong Delta, yet the forests are being destroyed at an alarming rate by pollution and deforestation to create farming land, fisheries or prawn farming. GIZ’s project aims to restore the ecosystem by rehabilitating the mangrove forests, thereby securing the basis of existence for many people. 

Protecting tropical forests, securing natural resources

As part of a second project, the TCCT supports the work of the tropical forest charity OroVerde in Latin America. The increasing frequency of droughts, heavy rainfall, floods and tropical cyclones also threatens many regions in the Caribbean and Central America. OroVerde has been working to protect the tropical rainforests there for over 30 years. The charity works on long-term projects that protect the forest and provide the locals with opportunities. Over the next three years Munich Re will be supporting the work of OroVerde on three project areas: Mexico, Guatemala and the Dominican Republic. Financial means will be used to renew and protect the forests, take measures to regenerate the forest floor and to support local farming. For example, agroforestry systems will be built up in a number of areas. These are agricultural production systems that combine elements of agriculture with forestry. As with a natural rainforest, an agroforest helps protect biodiversity and the forest floor from erosion and degradation. The trees also store water, thereby regulating water supply throughout the entire region. Planting trees in a targeted manner and protecting water sources has been shown to improve the water supply, for example in a project area in Guatemala. A share of donations will also be used to equip fire fighters with protective gear so that they can contain the forest fires, which are also occurring more frequently in the tropics, as quickly as possible.
Insurance is our core business. It is how we make society more resilient. But we also want to use our expertise, experience and financial means to avoid losses, or at least to reduce their impact. Climate protection has been our focus for decades. With the two reforestation projects, we can reach people who are unable to protect themselves against the effects of climate change.
Michael Menhart, Global Chief Economist, Munich Re

Reducing risk and risk transfer for more effective protection

These kinds of ecosystem-based adaptation initiatives are promising, and look to make a long-term, positive impact on the regions that are heavily affected by the effects of climate change. This also pertains to regions in which insurance already plays a role boosting communities’ resilience. The measures could reduce future losses, thereby allowing insurance premium to be reduced. Munich Re is examining possibilities like these. A group of scientists from the University of California, Santa Cruz, The Nature Conservancy and Munich Re recently released a study of a solution that combines risk transfer with risk reduction. The study examines to what extent restored coral reefs can reduce the risk of storm floods to property and housing along the coast. Whilst the study focuses on the advantages of restoring coral reefs, we are convinced that a combined solution − ecosystem-based adaptation initiatives and suitable insurance solutions - can also be applied to other regions.

We take a holistic approach to risk and develop solutions to avoid, reduce or transfer risk. Measures to reduce risk are especially critical to people who cannot yet afford insurance, which is why the Tackling Climate Change Together project - a joint effort from Munich Re and ERGO - is focusing precisely on this group.