According to the Principles for Sustainable Insurance, published by the United Nation Environmental Program’s (UNEP) Finance initiative, the aim is to reduce risk, develop innovative solutions, improve business performance and contribute to environmental, social and economic sustainability. In other words, do what is already being done, whilst contributing to the environment, promoting social factors and complying with a long list of governmental requirements. Easy, right? Well, yes and no.
It is widely advocated that insurers play a pivotal role towards a sustainable future. Although social and governance considerations are receiving increased regulatory and stakeholder attention lately, it is environmental considerations, in particular climate change, that dominates the call for action. Insurer’s triple role as risk managers, risk carriers and institutional investors, strengthen the call for action towards them in the need to meet the Paris agreement(2). However, for insurers this is not an easy call. The industry is competitive and highly regulated and faces many challenges in the transition to managing ESG risks.
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- Insurers put to the (sustainability) test .pdf • 0,61 MB