United Nations Development Programme (UNDP) launches report on climate transition plans for insurers

PRESS RELEASE

United Nations Development Programme (UNDP) launches report on Climate Transition Plans for Insurers

Baku, 14 November 2024 – On Finance Day at COP29, UNDP’s Sustainable Insurance Forum (SIF) has released a pivotal report titled Supervisory Thinking on Insurance-related Climate Transition Plans. This comprehensive document offers valuable insights into the current supervisory landscape regarding transition plans and highlights the challenges in developing regulatory guidance for the insurance sector as it shifts toward a net-zero future.

The report outlines several key findings:

• Early-Stage Supervisory Thinking: Many insurance supervisors are still in the early stages of conceptual thinking around insurers’ transition plans. While these plans are recognized as essential components of risk management, specific requirements and guidance are yet to be established by most supervisory authorities.
• Complexity in Regulatory Development: The report identifies significant challenges in formulating supervisory requirements for transition plans. These include uncertainties surrounding the roles of financial regulators and supervisors, issues related to data adequacy and accessibility, and the absence of internationally standardized guidance.
• Support for Insurers’ Transition: It emphasizes that supervisors can facilitate insurers’ progress toward net-zero by providing clear guidance on metrics, enhancing capacity building, and improving access to relevant data.

Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau of Policy and Programme Support stated, “The SIF Transition Plans Working Group’s report urges insurance supervisors to take immediate and proactive measures to guide the global transition to a sustainable economy. As many supervisors are just beginning to tackle the complexities of transition planning, their role is paramount. By providing clear direction, enhancing data transparency, and fostering collaboration, supervisors can create an environment conducive to the development of credible transition plans.”

The report also proposes essential next steps for insurance supervisors, which include:

• Enhancing coordination among authorities to share best practices and align frameworks.
• Advocating for the establishment of an international baseline and consistent global guidance.
• Assisting regulated entities in overcoming data-related challenges.
• Collaborating with the insurance sector to pool resources for capacity-building initiatives.

Daniel Wang, Chair of the UNDP’s SIF, stated, “Insurance supervisors have a vital leadership role to play by engaging and working with the insurance industry amidst the global transition to a net-zero economy. The collective progress made now will contribute to a sustainable future. I extend my sincere thanks to my fellow SIF members, and in particular the SIF Transition Plans Working Group, for this critical work. Much more needs to be done on this journey and we all need to press on. The development of credible climate transition plans will help bring about a more resilient and sustainable financial system for all.”

To read UNDP’s SIF report ‘Supervisory Thinking on Insurance-related Climate Transition Plans’ and the summary, please visit the following links:
TPWG Report  ————   TPWG Summary

About UNDP: UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people and the planet. Learn more at undp.org or follow at @UNDP.

About UNDP’s Sustainable Insurance Forum (SIF)

Established by the UN with the support of the International Association of Insurance Supervisors (IAIS) in December 2016, UNDP’s Sustainable Insurance Forum (SIF) is a global network of 39 insurance supervisors and regulators, overseeing 92% of the global insurance market. This collaborative network aims to address sustainability and climate change issues impacting insurance companies and markets, and policy holders in their jurisdictions. Learn more at sustainableinsuranceforum.org or follow at LinkedIn: UNDP Sustainable Insurance Forum

Press Contact:

Ayesha Babar
Head of Strategic Coordination and Communications, UNDP Sustainable Finance Hub
Ayesha.babar@undp.org