Building a more sustainable insurance industry

Key messages

• In response to rising demands from stakeholders to disclose and address environmental, social, and governance (ESG) issues, a growing number of insurance companies have appointed chief sustainability officers (CSOs) or their equivalent.
• Many insurer CSOs are struggling to overcome common organizational hurdles—such as insufficient resources, an uncertain governance structure, and the lack of individual accountability—to implement an effective sustainability agenda.
• To expand sustainability beyond the realm of good corporate citizenship, insurer CSOs will likely need more tangible metrics, especially relating to return on investment. This can help them gain support among business line and functional leaders.
• Companies that fail to empower and equip ESG leaders to overcome these hurdles may be outflanked by more proactive competitors and draw greater scrutiny from regulators. They could also lose socially conscious customers, investors, and employees, whose ranks continue to grow.
• As underwriters and institutional investors, insurers are in a unique position to influence policyholders and policymakers in tackling ESG challenges. They can shift focus and embrace a “higher bottom line” that values the planet and people as much as profits.