SBTi Kickstarts Net-Zero for Insurance Underwriting with New Industry Brief
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The SBTi has published a new Insurance Underwriting Industry Brief as a first step towards the development of a Financial Institutions Net-Zero Insurance Standard.
The finance sector has tremendous potential to accelerate efforts to decarbonize the private sector. In 2020, the Science Based Targets initiative (SBTi) developed metrics and target-setting methods for the finance sector’s investment and lending activities. Now, it is setting out to enable financial institutions to decarbonize their insurance underwriting portfolios.
Re/insurers hold a significant share of the world’s assets and liabilities within their balance sheets, including roughly US$6.8 trillion in premium volume (Swiss Re Institute, 2023) and over US$35 trillion in global assets under management (TheCityUK, 2023). This could put insurance companies in a position to foster the transformation necessary to reach a net-zero economy.
By applying their influence as risk managers, risk carriers and institutional investors, insurance underwriters could pave the way to reduce greenhouse gas (GHG) emissions in line with the temperature goals of the Paris Agreement.
That’s why the SBTi has published a new Insurance Underwriting Industry Brief as a first step towards the development of a Financial Institutions Net-Zero Insurance Standard. The Brief provides background information on different approaches and potential methods for setting science-based targets to decarbonize insurance underwriting portfolios.
The Brief also provides context for how the Financial Institutions Net-Zero Insurance Standard will fit into the SBTi’s existing target-setting framework for financial institutions. It highlights core principles, potential starting points and next steps in the development process.