Managing environmental, social and governance risks in non-life insurance business

ABSTRACT

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 (SDGs), Paris Agreement
on Climate Change, and Sendai Framework for Disaster Risk Reduction in 2015, and the
upcoming Post-2020 Global Biodiversity Framework, there is growing pressure and urgency
across all sectors of society to respond and find solutions to sustainability challenges the
world is facing.
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. Some ESG issues have
varying implications, with some increasingly being recognised to be potentially financially
material (e.g. climate change, ecosystem degradation, pollution).
The four Principles for Sustainable Insurance, including a list of possible actions, provide a
common aspiration and global framework for the insurance industry to manage ESG issues,
and to strengthen its contribution to building resilient, inclusive and sustainable communities
and economies.
This document is a result of a multi-year PSI initiative to develop the first global guide to
manage ESG risks in risk assessment and insurance underwriting. It has an initial focus on
non-life insurance business—also known as property and casualty insurance business.