“Sustainability Leadership in Insurance” event series

In collaboration with the UNEP FI Principles for Sustainable Insurance (PSI) we co-organised a conference addressing key aspects of “Sustainability Leadership in Insurance”. Against the backdrop of the COVID-19 crisis, it was rescheduled as a series of four virtual events held between May and August 2020. It examined how the re/insurance industry can help pave the way for a more sustainable world post-crisis. A year earlier, we had helped organise a similar event focusing on the role of investing.

Sustainability Leadership in Insurance

First event

Setting the agenda for the series, its first event brought together the chief executives of UNEP and Swiss Re and other senior figures with an international audience. The discussion focused on the full implications of the pandemic. While the immediate priority has been to slow its spread and protect people, emphasis was placed on the fact that 60% of all known infectious diseases in humans – and 75% of all emerging ones – are zoonotic. Never before have there been so many possibilities for pathogens to pass from wild and domestic animals to humans. We need to embrace the lesson that deteriorating ecosystems undermine societies’ resilience. The re/insurance industry can and must be part of reinforced efforts to address habitat and biodiversity loss, along with climate change.

Second event

The second event of the series then looked at how to effectively tackle sustainability risks in underwriting. Two key notions were advanced during the debate: that an integrated, broad-based risk management approach is superior and that sustainable business is good business in the long term. This means that the sustainability agenda really is at the heart of commercial activity. Building on the insights of the first event, it was reiterated that we face a dual challenge: climate change and biodiversity loss. While climate change has been at the top of the agenda in recent years, participants agreed that the financial sector needs to do more to address biodiversity risks. Fittingly, the event served as a launch pad for a report produced jointly with the WWF on spatial finance.

Third event

In the third event, the focus switched to the UN Sustainable Development Goals (SDGs) and the re/insurance industry’s contribution to them. While many of its products and services already support the SDGs, efforts will need to be further strengthened. It was argued that an industry-wide roadmap would create additional momentum. Contributions and discussions then turned to important elements of such a roadmap, identifying consistent frameworks for impact measurement, increasing transparency and innovation utilising digitisation. For all of them, partnerships among multiple stakeholders were said to be vital. To make progress towards these goals, an initiative led by the UNEP FI PSI to develop Insurance SDGs was formally launched at the event.

Fourth event 

The fourth and final event of the series put the spotlight on climate change, specifically on how re/insurers can align their businesses with the Paris Agreement. While many have already made significant progress on transitioning their investments, the participants agreed that now is the time to manage climate risks in their re/insurance portfolios more systematically. Three main topics emerged in this context. Firstly, the industry needs more innovation, developing products and services that really incentivise climate risk mitigation. Secondly, the large variations between different real-economy sectors mean that a reliable methodology is required to measure the (mis)alignment of a specific portfolio with the 1.5°C target of the Paris Agreement. A technical paper published by the Chief Risk Officer (CRO) Forum on carbon footprinting methodologies is an important step in that direction. Thirdly, given these challenges, close cooperation with clients, but also with governments, regulators, scientists and other stakeholders, was regarded as essential to achieve real progress.