Insurance Industry Impact – Sustainability & Resilience: What Legislators & Other Stakeholders Need to Know
A question that we have been hearing from policymakers and other industry stakeholders is why insurers should be interested in Environmental, Social & Governance (ESG) issues. In this article we will explore the nexus between the insurance industry and ESG issues with a focus on climate and sustainability.
The insurance industry is an important stakeholder in making society more resilient to risks, protecting both people and the planet. From pandemic readiness, to embracing the digitization of business and preparing our workforces for the future, the insurance sector is on the front lines. The industry is already working with governments, companies, and individuals at a global, national, and local level on many ESG issues.
Insurers are uniquely placed to provide businesses with an informed view of climaterelated exposures, vulnerabilities, and hazards. We have access to the latest tools and risk management practices and can assist in developing climate resilience strategies. The industry’s perspective on strategic developments can provide optimism about the ability to deliver against the targets required to limit global warming.
While we are consistently bombarded by the negative impacts of climate change, positive developments have recently been made, such as a pandemic related drop in global energy demand, new commitments from world leaders, new green technologies, and green investment.
We have made progress, but significant work remains. Companies can adopt mitigation measures to curb carbon emissions and develop net-zero business models, leveraging insurer’s experiences. The insurance industry can assist risk managers and investors with decarbonization transition risks to achieve a carbon neutral future.
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