Background

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Climate change is accelerating structural inequality, with projections suggesting that 720 million people could be pushed back into poverty and 140 million displaced as climate refugees by 2050. By 2030, heat stress alone could lead to the loss of 80 million full-time jobs globally, disproportionately affecting the Global South. In South and Southeast Asia, informal and migrant workers, who constitute the majority of the labour force, are already facing rising exposure to extreme heat, toxic air, and unpredictable rainfall, without any financial safety net. These conditions often result in income loss, productivity disruptions, detrimental to health, lives, and livelihood – sometimes resulting in forced and unsafe migration. Yet, despite escalating risks, these workers remain excluded from both formal remedy systems and climate adaptation frameworks.

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This session will explore how parametric insurance can serve as an innovative, anticipatory remedy mechanism that bridges this gap. Unlike traditional insurance, parametric products trigger automatic, pre-agreed payouts when agreed-upon thresholds of the relevant climate stressor – such as heat, air quality, or rainfall are met. Businesses play a critical role in enabling such mechanisms by co-financing premiums, integrating insurance into supply chain risk management, and embedding solutions into responsible sourcing, ESG, and human rights due diligence (HRDD) frameworks. This will ensure businesses move from risk mitigation or passive compliance to proactive protection - fulfilling their human rights responsibilities while building resilience across their value chains.

 

The session draws on real-world implementation of two field-tested parametric products deployed in India, covering over 15,000 workers: The world’s first Air Quality Index (AQI)-based parametric insurance for urban informal workers and a Heat Stress Insurance product for construction and outdoor laborers.

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Key Objectives

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• Highlight lived experience of climate-vulnerable workers,

• Present field-tested parametric insurance models, their design-to-deployment journey and Showcase how businesses can integrate such tools into ESG, HRDD, and procurement systems

• Examine the insurance industry’s role in co-creating inclusive protection models and

• Foster cross-sector dialogue on replication and policy integration.

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Guiding Questions

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• How can parametric insurance and similar financial innovations serve as effective, rights-based remedies for workers facing climate-related risks, particularly in informal sectors?

• What are the pathways through which Businesses can support and scale these models by exploring alignment with ESG and HRDD frameworks?

• What are the opportunities for cross-sector collaboration, enabling partnerships between businesses, civil society, insurers, and grassroots actors to adapt and deploy worker-centric protection models across regions and industries?

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Format

• Film screening and discussion

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Session Partners