2 September 2022. The media and the public are attaching growing importance to the topic of sustainability and are calling on companies to take a critical look. Companies that lack vigilance on this issue risk receiving damage to their reputation. A credible discussion of the opportunities and challenges of sustainability is also very important for the company's own employees: Many employees cite sustainability as a central argument for why they want to work in the insurance industry and not in other, perhaps better-paid sectors.

Hedging risks with sustainability in mind
"Sustainability is a growing customer need and an increasingly important issue for regulators and policymakers," says Prof. Dr. Martin Eling, author of a just-published white paper and head of the study titled "Framework for Sustainability from the Perspective of the Perspective of the Insurance Industry."

Regulatory requirements on sustainability are expected to increase significantly, he said. "For example, the German regulator BaFin has formulated specific requirements for dealing with sustainability risks. With the Disclosure and Taxonomy Regulation, EU insurers are facing further extensive reporting obligations, including quantitative ones, which primarily affect capital investment," Eling elaborates. Corresponding developments are also to be expected in Switzerland. At the moment, the focus in the EU is still very much on the topic of ecology, while work on a social taxonomy, e.g. concrete social measurements and reference values, will still take some time.

Shaping a sustainable insurance industry
The study by the Institute of Insurance Economics aims to develop a holistic framework for the sustainability discussion. In doing so, the classic dimensions of operational standards relating to the environment, society and corporate management are expanded to include the aspects of economy and technology. Study author Martin Eling cites financial sustainability and the effective use of new technologies as key prerequisites for ecological and social sustainability. Concrete measures of sustainability in the insurance industry include:

• Awareness campaigns (e.g., sustainability reports)
• political lobbying (e.g., advocating for appropriate regulation)
• Promoting transparency (e.g., to make environmental sustainability measurable)
• Bringing in expert knowledge

"The insurance industry has a great opportunity to actively and credibly engage in the socio-political debate on the topic of sustainability and thus make an important contribution to the economy and society," says Martin Eling.

The detailed study results as well as 50 contributions of the insurance industry to sustainability can be found in the white paper "Framework for Sustainability from the Perspective of the Perspective of the Insurance Industry" (in German).

Image: Adobe Stock / panadda