After a multi-year global consultation process, leading insurers from around the world and the UN Environment Programme (UNEP) launched last the first global insurance industry guide to tackle a wide range of sustainability risks—from climate change, ecosystem degradation, pollution and animal welfare and testing; to child labour, controversial weapons, and bribery and corruption.

REPORT: Global guidance on the integration of environmental, social and governance risks into insurance underwriting



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.

This guide goes to the heart of implementing the Principles for Sustainable Insurance, particularly Principle 1: “We will embed in our decision-making environmental, social and governance issues relevant to our insurance business”. It builds on studies since 2007 on the relevance of ESG issues to the insurance business that led to the development of the PSI, and subsequent studies and activities after the PSI was launched in 2012.


There is growing interest in the insurance industry and the wider financial sector in under- standing the correlation between ESG factors and strong performance of companies across industries. This first insurance industry guide on ESG issues will raise awareness of the potential benefits of ESG integration in the insurance business model.

The insurance industry is also subject to a growing number of international standards and best practice frameworks across ESG issues (e.g. UN Guiding Principles on Business and Human Rights, the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures). At the same time, the number of industry participants who actively integrate ESG risk factors into their risk assessment and underwriting process is growing. There is an opportunity to streamline information requests and build knowledge within the insurance industry, making it easier for business partners to carry out ESG due diligence on clients and transactions. For smaller insurance industry participants, navigating these standardsand frameworks and applying them to their business can be resource inten- sive and confusing.

Some ESG issues, such as climate change, require efforts from the entire industry. Working together as an industry to raise awareness of the importance of ESG issues and to support clients in managing them will play an increasingly important role in the future.

The benefits for companies taking an active role in developing an ESG approach not only helps mitigate reputation risk to their organisations and manage societal expectations, but will also help them capitalise on developing understanding of the financial benefits of clients with strong ESG performance. Stronger internal ESG expertise can lead to a competitive advantage in engaging and supporting clients. Furthermore, as companies around the world strive to support the SDGs, an active ESG approach can be a source of engagement for employees in an increasingly challenging market to secure and retain the next generation of talent in the insurance industry.

The aims of this guide are to:

  1. Provide optional guidance to insurance industry participants in developing approaches to assess ESG risks in non-life insurance business transactions, particularly industrial and commercial insurance business
  2. Support clients, intermediaries and other stakeholders in facilitating ESG-related informa- tion which might be required during the ESG due diligence of transactions
  3. Highlight the materiality of ESG risks to various lines of business and economic sectors, including characteristics which might affect the ability to assess and mitigate such risks
  4. Address growing concerns by stakeholders across society (e.g. NGOs, investors, govern- ments) on ESG risks and articulate the peculiarities of the insurance business
  5. Demonstrate the valuable role the insurance industry plays in the global economy and society, and strengthen the industry’s contribution to sustainable development

ESG risks can vary by country or region, line of business, type of cover, economic sectors, client characteristics, over time, and due to other factors. The guide helps draw attention to this complex range of considerations and how some industry participants are going about their integration of ESG risk factors into non-life risk assessment and underwriting.

It outlines 8 areas comprising possible actions for insurers to manage ESG risks—also known as sustainability risks—in non-life insurance transactions, focussing on risk assessment and insurance underwriting. These areas include developing a company’s ESG approach and risk appetite, integrating ESG issues into the organisation, establishing roles and responsibilities for ESG issues, escalating ESG risks to decision-makers, detecting and analysing ESG risks, and decision-making and reporting on ESG risks.

The guide also includes two high-level, optional “heat maps” indicating the potential level of ESG risk across economic sectors and lines of insurance business. The heat maps break down ESG issues into specific themes and risk criteria and provide examples of risk mitigation and good practice. Further references to various standards and technical guidelines are included in the guide to support decision-making on a range of ESG issues.


We are indebted to all the individuals and organisations worldwide who contributed invaluable insights to the development of this pioneering guide through interviews, a global survey, a public consultation, and various meetings and events.

PSI Project Team Co-Leads

  • Butch Bacani, Programme Leader, UN Environment Programme’s Principles for Sustainable Insurance Initiative
  • James Wallace, Insurance Lead – ESG Integration, Group ESG Office, Allianz SE

PSI Project Team Members

  • Belén Barona, Isabel Bodlak-Karg, Alina Morozova (Allianz)
  • Ioanna Skondra (American Hellenic Hull)
  • Lisa Brown, David Snyder (American Property Casualty Insurance Association)
  • Esther Crauser-Delbourg, Suzanne Scatliffe, Sylvain Vanston (AXA)
  • Andrea Dallevedove, Barbara Morgan, Marta Pagan, Lucia Silva (Generali)
  • Isabel Braga, Fatima Lima (MAPFRE)
  • Lucia Rückner, Michael Willander (Munich Re)
  • Sharanjit Paddam, Sereina Pfister (QBE)
  • Sarah Hartley, Alan Shaw, Laura Spiers (RSA)
  • Jeeten Morar, Vanessa Otto-Mentz (Santam)
  • Thierry Corti, Martin Weymann, Lasse Wallquist (Swiss Re)
  • Randy Dumm (Temple University’s Fox School of Business)
  • James Hutchin (University of Technology Sydney)
  • Olivia Fabry, Alice Merry, Yingzhi Tang, Rob Wilson (UNEP)
  • Matt Shea (West Chester University)
  • Linda Freiner, John Scott (Zurich)