UNEP FI Principles for Sustainable Insurance Initiative (PSI Initiative)

A global sustainability framework and initiative of the United Nations Environment Programme Finance Initiative (UNEP FI).

The Principles for Sustainable Insurance (PSI) provide a global roadmap to develop and expand the innovative risk management and insurance solutions to promote sustainability. By signing the agreement, insurers undertake to consider ESG aspects along the entire value chain.

The PSI are a voluntary and aspirational framework.

Signatories can publicly demonstrate their organisation’s adoption of sustainable insurance aims and their accountability and transparency to the public in managing ESG issues, gain access to UNEP and UN system expertise and resources on ESG issues, policymaking and science, as well as access to UN events to liaise with governments on ESG issues.

Who is in scope?

Insurers, reinsurers and pension funds.

How do investors have to consider sustainability in general?

The four Principles of the PSI include:

1. Embed ESG issues relevant to the firm’s insurance business into decision-making

Possible actions can relate to: Company strategy, Risk management and underwriting, Product and service development, Claims management, Sales and marketing, and Investment management.

Examples include:

1. To establish a company strategy at the Board and executive management levels to identify, assess, manage and monitor ESG issues in business operations

2. To integrate ESG issues into investment decision-making and ownership practices

3. To integrate ESG issues into risk management, underwriting and capital adequacy decision‑making processes, including research, models, analytics, tools and metrics

4. To integrate ESG issues into recruitment, training and employee engagement programmes

2. Cooperation with clients and business partners to raise awareness of ESG issues, manage risk and develop solutions

Possible actions can relate to: Clients and suppliers, and insurers, reinsurers and intermediaries.

Examples include:

1. Dialogue with clients and suppliers on the benefits of managing ESG issues and the company’s expectations and requirements on ESG issues

2. To support the inclusion of ESG issues in professional education and ethical standards in the insurance industry

3. Cooperation with governments, regulators and other key stakeholders to promote widespread action across society on ESG issues

Possible actions can relate to: Governments, regulators and other policymakers, and other key stakeholders

Examples include:

1. To support prudential policy, regulatory and legal frameworks that enable risk reduction, innovation and better management of ESG issues

2. Dialogue with business and industry associations to better understand and manage ESG issues across industries and geographies

4. Demonstration of accountability and transparency by regularly disclosing publicly the progress in implementing the Principles

Examples include:

1. To assess, measure and monitor the company’s progress in managing ESG issues and proactively and regularly disclose this information publicly

On which sustainability topics do investors have to report?

The insurer, reinsurer or pension fund is free to decide the content of its disclosure. Regardless of the content, it is required to:

• Disclose annually, from the date the organisation became a signatory, its progress in implementing the Principles. The organisation is free to decide when its disclosure is completed each year.

• Make its disclosures public and allow them to be publicly available on the UNEP FI website.

The insurer, reinsurer or pension fund may choose to answer the following recommended guide questions to explain how Principles 1, 2 and 3 (see above) are being implemented:

• What are your aspirations and targets for this Principle?

• How do you plan to achieve them?

• What key actions have you taken to date to achieve them (i.e., demonstrate progress)?

Does the initiative define specific sustainability indicators?

The PSI do not set out specific KPIs.