Background

As risk managers, insurers and investors, the insurance industry plays an important role in addressing environmental, social and governance (ESG) issues. ESG issues—also known as sustainability issues pose a shared risk to insurers, communities, businesses, cities, governments and society at large, providing a strong incentive for innovation and collaboration. Some ESG issues have varying implications, with some increasingly being recognised to be potentially financially material (e.g. climate change, ecosystem degradation, pollution).

As part of UNEP FI’s mission to support insurers align their business with ESG standards and sustainability objectives, the Principles for Sustainable Insurance (PSI) Initiative together with leading insurers across the globe developed the first-ever ESG guides for the global insurance industry. 

Managing Environmental, Social and Goverance Risks in Non-Life Insurance Business

Developed as a result of a multi-year PSI initiative, this project was the first global guide to manage ESG risks in risk assessment and insurance underwriting.  The project aims were to:

The final version of the guide was launched in 2020.

Managing Environmental, Social and Governance Risks in Life & Health Insurance Business

Through leadership from HSBC Life, the PSI built on the ESG guide for non-life insurance report by developing the first global guide to manage ESG risks in Life & Health. The project aims were to:

  • Provide recommended guidance to insurance industry participants in developing approaches to evaluate the potential impact of ESG risks on underwriting risks in the Life and Health insurance business, and provide examples for consideration to mitigate such risks
  • Highlight the potential materiality of certain ESG risks on the underwriting risks in Life and Health insurance business, and provide examples for consideration to mitigate such risks
  • Address growing concerns by stakeholders across society (e.g. NGOs, investors, governments) on ESG risks and articulate the peculiarities of the insurance business
  • Demonstrate the valuable role the insurance industry plays in the global economy and society, and strengthen the industry’s contribution to sustainable development through enablement of collective coverage for individuals

The final guide launched in 2022.

Reference materials/links

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