Guide for Insurers: Sustainable Investing Questions Answered

A strong global focus on climate change by governments, regulators and consumers has launched Environmental, Social Environmental (ESG) considerations on to centre stage for investment decisions.

The insurance sector has an important role in the advancement of ESG considerations in finance. Not only do they represent Europe’s largest institutional investor group, but as risk managers insurers also identify and quantify material climate risks.

With many questions still in the air as the insurance industry navigates this new ESG age, we offer you answers to some of the biggest basics. To ease your summer reading, we will offer the chapters in installments every two weeks. 

Questions Answered

1. Which definition of Sustainable Investing is most useful?

Discover the differences among the main ESG investment terms relevant to insurers. These may at first sound similar but in fact define different approaches: Sustainable, Responsible and Impact Investing.

2. Why? Risks of not adopting sustainable investing, and the benefits offered by ESG analysis

Consider why an insurer who fails to encompass ESG factors will not only find it more difficult to achieve the Paris Agreement and UN commitments, but may likely face financial risks of potential future losses, reputational risks and regulatory risks. Discover some of the benefits, including more comprehensive risk management and new ways to identify investment and commercial opportunities.

3. How? Implementation of ESG approaches

From the development of an SRI charter as a guide to an ESG research and analysis approach which suits your investment processes. Examine some implementation paths open to insurers, from Exclusion to Thematic Strategies. Discover options for stewardship, as well as sustainability measurement and reporting.

4. With what results? Sustainability and financial performance

How does Sustainable Investing affect performance? The variety of sustainable strategies is large and diverse, and its growth has accelerated. Clearly not all strategies will be top performers, so insurers must be selective. A sustainable approach does not necessarily mean sacrificing returns; it can often improve portfolio’s risk/return profile. Explore research and our case studies.

5. What about the COVID-19 crisis? Why has Sustainable Investing been in the news?

Discover what lies behind the resilience of sustainable companies during the COVID-19 market crisis and how insurers can both benefit from and play a part in sustainable market trends.

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