Sustainable Investments in the Insurance Sector

Abstract

Achieving global environmental and climate agreements requires the efforts of not only supranational organisations and states, but also the financial sector, including the insurance sector. In addition to the core business of insurance companies, i.e. the undertaking of risk, their investments also play a key role. Recent years have seen an increasing number of unit-linked products that seek to contribute to some sustainability goal. However, the sustainability approaches and investor disclosures of collective investment undertakings and unit-linked asset funds have not been uniform, warranting regulation on account of the growing risk of greenwashing. New EU legislation has created the opportunity, inter alia, to distinguish collective investment undertakings and asset funds in terms of sustainability and to ensure greater transparency for investors. While there is no doubt about the need for regulation, at this stage it poses a number of challenges for institutions.