Some of the world’s largest insurance companies have signed up to a set of Principles for Sustainable Insurance launched by the United Nations.
A total of 27 businesses, including ING, Munich Re, and Aviva, have backed the new principles, which commit them to consider environmental, social and governance issues in decision-making, work with clients to raise awareness of social and environmental issues, and to try to persuade governments and regulators to promote action on such matters.
Signatory companies have also agreed to issue an annual public report on the progress they make on implementing the principles.
The principles have been created by the United Nations Environment Programme’s Finance Initiative (UNEP-FI) in conjunction with a core group of insurance companies. The founding signatories manage more than $5 trillion in total assets, and represent more than 10 per cent of the world volume of insurance premiums.
UNEP-FI said the principles, which have taken six years to put together, ‘represent the first-ever global sustainability framework tailored for the insurance industry that takes into account the fundamental economic value of natural capital, social capital and good governance’.
It said the insurance industry is potentially a significant lever for change given the huge amounts of money it manages – and that it is increasingly affected by a number of sustainability issues such as climate change, natural disasters, water scarcity, food insecurity and pandemics.
Work on the principles began in 2006, when Unep FI created a working group of insurers initially co-chaired by Axa (France) and Insurance Australia Group.
They used as their model the Principles for Responsible Investment which were launched in 2006 and are now supported by 1000 investors from 50 countries. The hope is that now the sustainable insurance principles have been launched, they will be quickly and widely adopted by the global insurance industry.
Other founding signatories of the new principles include Mapfre (Spain), RSA (UK), Santam (South Africa), Storebrand (Norway) and Tokio Marine and Nichido Fire Insurance (Japan).