27 February 2019
The first ever guidance designed for the global insurance industry to integrate sustainability into industrial and commercial business has launched for public consultation today. The result of a multi-year initiative co-led by UNEP FI’s Principles for Sustainable Insurance and leading insurer, Allianz, the guide is designed to manage environmental, social and governance risks in insurance underwriting—the core process of evaluating, defining and pricing insurance risks.
Environmental, social and governance (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. This guide is also useful for stakeholders who might need to assess or obtain information on ESG risks from insurance industry participants, and who would like to better understand the relevance of ESG issues to insurers and approaches to managing them. It contains ‘heat maps’ organised by economic sector and line of business to help quick assessment of where potential ESG risks lie.
As risk managers, insurers and investors, the insurance industry plays an important role in promoting economic, social and environmental sustainability—or sustainable development. With the adoption of the UN Sustainable Development Goals, Paris Agreement on Climate Change, and Sendai Framework for Disaster Risk Reduction in 2015, there is growing pressure and urgency across all sectors of society to respond and find solutions to sustainability challenges the world is facing. Some ESG issues, such as climate change, require efforts from the entire industry. Working together as an industry to raise awareness of the importance of ESG issues and to support clients in managing them will play an increasingly important role in the future.
The consultation period will be from 27 Feb to 30 Jun 2019 and the first edition of the guide, “Underwriting environmental, social and governance risks in non-life insurance business” will be produced by the end of the year. The intention is to update it on an annual basis.
The guide is launching at the Principles for Sustainable Insurance-Allianz event in Munich today, Insuring for Sustainable Development: Raising the industry’s ambition, and was sponsored and co-led by Allianz. The project team members are: Allianz, AXA, Generali, MAPFRE, Munich Re, QBE, RSA, Santam, Temple University’s Fox School of Business, UN Environment Programme Finance Initiative, University of Technology Sydney, West Chester University, and Zurich Insurance.
Download the guide here.
Give your feedback by completing our online consultation here.
Click here to find out more about UNEP FI’s Principles for Sustainable Insurance.