Berne Union Climate Working Group: The continuing momentum for change

Karin Wessman, Chair of the Berne Union Climate Working Group, and Head of Sustainability at EKN discusses the state of play with this important forum for sharing good practice on climate change mitigation.

How is the new BU Climate Working Group progressing and what is your agenda for the future?

Karin Wessman (KW): The Berne Union Climate Working Group was set up in early 2022 and we’re continuing with the same structure we initiated then. It’s a working group, rather than a committee, and that’s important. The working group consists of 13 Berne Union member organisations, representatives from those who have expressed a strong interest and track record in advancing the climate agenda. Within the working group, we share good practice, new tools, new products, new issues that are coming up, with each other.

Importantly, all output is posted on a transparent platform. There's an enormous amount of work that's going into the climate agenda from – I dare say – all Berne Union member organisations. But we all start from different points and we all have our uniqueness.

In 2023 and onwards, we continue to meet as a working group and look at how best we can use this platform to learn and share good practice collectively and to learn about other initiatives and what other organisations are doing. As one example, we recently hosted a seminar with the incubation team behind a potential Net Zero ECA Alliance.

What are the different components of the working group?

KW: Early on in the working group, we decided on a few work streams of particular interest for participants: products, incentives and innovation, best practices in low carbon transition, and policy coherence and alignment.

In the products, incentives and innovation work stream we profile innovations in products being offered and those being made in treasury and in blended finance, for example.

Best practices in low-carbon transition is where participants share their experiences in setting targets, science-based target reporting, portfolio accounting, for example. Third is the policy coherence and alignment stream where we examine global policy developments that are materially impacting export credit either directly or indirectly.

Transparency is very important in what we do. We’re a small technical working group but we have many interested colleagues in our respective organisations. Also we know there is a lot of interest from non-Berne Union members. That’s why we felt it important to have our dedicated Berne Union Climate Working Group webpage and a presence on LinkedIn.

The idea of a working group can seem a bit nebulous – but even if we’re not climate change experts, there is a library/wealth of resources of people across different organisations and representatives in the climate working group listed that you can reach out to. It’s a one stop shop for sharing knowledge.

How will ECAs address any climate change fatigue that some investments are facing with the headwinds of geopolitics and an inflationary backdrop?

KW: Action against climate change is happening [in our sector], and I don’t think momentum can be slowed down. Depending on where ECAs and other organisations are in the world – bearing in mind that the Berne Union is much broader than ECAs alone – there are a variety of requirements and business opportunities.

Your customers will have this on their agenda, as will all your partners in the financial sector. And yes, climate action is influenced by geopolitics but there is definitely momentum.

Bear in mind, if climate change is not addressed it adds a layer of uncertainty and complexity to an already uncertain situation. Just as we've seen with recent droughts, floods and fires, the physical manifestations of climate change are what we need to be prepared for as organisations, otherwise it's just going to get even more complex. It's all about preparation and keeping the momentum going.

Another observation is that there have been organisations and companies that have been quite vocal about their green credentials, and that may be slowing down. This is a result of increased maturity in terms of good practice in climate change mitigation through new products, clearer definitions of what is green. This is what naturally happens when markets start to get a common understanding of an issue, a common language and common reporting requirements.

What are the opportunities presented by the revisions to the OECD Arrangement with respect to climate finance and other elements of ESG?

KW: It's good that these steps are being taken. Longer tenors and more flexible repayment schedules are definitely a tool for ECAs in our efforts to support climate transition.

It is also positive to see OECD countries coming together and agreeing on the reform, because historically such revisions have taken a long time. That's a testament to the urgency and opportunity for OECD ECAs to drive positive change. I hope that this is the first step of many.

How important will collaborative efforts be – and how important is it for ECAs to learn from each other?

KW: It's absolutely key. One of the added values of this working group is that it has a broad representation from Berne Union members. ECAs already talk to each other quite a lot on these topics, but being able to learn from insurers and multilaterals is really the added value because cross collaboration is absolutely vital. None of us is going to be able to be effective in this work alone.

How can Berne Union members, and non-members, get involved?

I encourage those who are interested in climate topics to take a look and feed in questions. We’re driven by demand – what do we need to do and how? Because the question we always ask ourselves is, what is everybody else doing? This is an opportunity to help us collectively answer that, so please do get in touch!