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SCOTT JAGOW: I don't have a lectern or a pointer, but I'm gonna talk about global warming anyway. Today, a group of investors said insurance companies better get serious about climate change. Or they'll pay dearly. From the Sustainability Desk Sam Eaton reports.

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SAM EATON: Hurricane Katrina slammed into the Gulf Coast just under a year ago, causing a record $45 billion in insured losses. One widely reported response from the insurance industry was to reduce its exposure by pulling out of risky areas. But the Insurance Information Institute's Robert Hartwig says the industry also faced up to a new reality.

ROBERT HARTWIG: In order to address America's vulnerability to climate change we need first address the root causes of that vulnerability.

Like greenhouse gas emissions. And according to a report out today the insurance industry has been doing just that. AIG, the world's largest insurer has launched a program to encourage companies to reduce greenhouse gases by trading CO2 credits on a new market exchange.

Other examples are tailored to the individual. Programs like pay-as-you-drive auto insurance. It rewards customers for driving less, and as a result, polluting less. Policies like these aren't just about cutting losses. They're also about exploiting a new market niche of green-minded individuals. Andrew Logan is with CERES, the green investment group which published today's report.

ANDREW LOGAN: The risk for insurance companies is in not seizing the opportunities. There's a lot that they can be doing in terms of new products and services that will help mitigate the problem and really preserve the market for themselves in the long-term.

Logan says there are dozens of new programs now coming on to the marketplace. But he says much more will need to be done if insurers truly hope to avoid the increased risk that goes hand-in-hand with a changing climate.

I'm Sam Eaton for Marketplace.