Principles for Sustainable Insurance
| Principles for Sustainable Insurance | |
| Source: | United Nations Environment Programme Finance Initiative |
| Sector: | Insurance |
| Prerequisites: | none |
| Classification | International information exchange & Individual institutional level |
| Potential Impact: | Moderate |
| Resource Impact: | Minimal at governmental level (awareness raising campaign among insurance community); Moderate at individual organizations’ level (mainly related to reporting requirements and annual fees) |
| Timing Implications: | Impact would take effect withing several years and several reporting cycles |
| Country/Region | Global (over 140 organizations worldwide, including insurers representing more than 25% of world premium volume and USD 14 trillion in assets under management) |
| Application to Armenia |
Signing onto the Principles would bring about several benefits to Armenian insurance players:
Access to the Annual General Meeting of signatories. |
Sustainable insurance is a strategic approach where all activities in the insurance value chain, including interactions with stakeholders, are done in a responsible and forward-looking way by identifying, assessing, managing and monitoring risks and opportunities associated with environmental, social and governance issues. Sustainable insurance aims to reduce risk, develop innovative solutions, improve business performance, and contribute to environmental, social and economic sustainability.
Launched at the 2012 UN Conference on Sustainable Development, the UNEP FI Principles for Sustainable Insurance serve as a global framework for the insurance industry to address ESG risks and opportunities. Endorsed by the UN Secretary-General, the Principles have led to the largest collaborative initiative between the UN and the insurance industry. The Principles are part of the insurance industry criteria of the Dow Jones Sustainability Indices and FTSE4Good. The main requirement to becoming a signatory of the Principles and a member of UNEP FI is the commitment to the annual public disclosure process.
The purpose of the Principles is to better understand, prevent and reduce ESG risks, and better manage opportunities to provide quality and reliable risk protection.
UNEP FI Principles for Responsible Insurance
| Number | Principle |
| #1 | Embed ESG issues relevant to the insurance business in decision-making. |
| #2 | Work together with clients and business partners to raise awareness of ESG issues, manage risk and develop solutions. |
| #3 | Work together with governments, regulators and other key stakeholders to promote widespread action across society on ESG issues |
| #4 | Stakeholders -proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals |
| #5 | Demonstrate accountability and transparency in regularly disclosing publicly progress in implementing the Principles. |
The Initiative launched several projects including:
- Global guidance on the integration of ESG risks into insurance underwriting
- Developing ESG underwriting criteria and principles for surety bonds
- Insurance industry contribution to the UN’s sustainable development agenda
- Greening China’s Financial System
- Understanding the links: A global consultation on how insurance policy and regulation could better support sustainable development
- Global Resilience Project
- PSI-WWF World Heritage Sites initiative
- Tobacco-Free Finance Pledge