The UN-backed Principles for Sustainable Insurance (PSI) has made progress since its launch in late 2011, including recruiting 40 of the world’s biggest insurers and re-insurers with assets of some $6trn (€4.5trn) and constituting a Board and Secretariat to promote the initiative and oversee implementation.
The PSI is essentially an adaptation of the Principles for Responsible Investment (PRI) for the insurance industry. This means that signatories pledge to consider environmental, social and governance (ESG) issues not only in investments, but, as the charter states, “in business principles, strategies and operations.” PSI signatories also say they will raise awareness about ESG issues within their respective industries and to be transparent about implementation of the principles.
During the PSI’s first annual general meeting (AGM) in Geneva last October, a 12-member Board was set up as well as a Secretariat to handle daily operations. Co-Chairs of the Board are Leona Murphy of the Insurance Australia Group and Andreas Spiegel of Swiss Re.
The Board’s 10 other members come from the following organisations: United Nations Environment Programme (UNEP), which, as with the PRI, helped get the PSI started; Aviva of the UK; Axa of France; Munich Re of Germany; Santam; SulAmerica; FWU Group; TAL; The Co-operators Group; and finally Tokio Marine & Nichido Fire Insurance.The PSI also said another 20 “supporting institutions” such as insurance trade groups, institutes and regulators have embraced the principles. Link to signatories
Like PRI signatories, those who are part of the PSI must report annually on their progress in implementation. “A signatory may choose to align or cross-reference its disclosure with that contained in, for example, annual reports or sustainability reports,” said Butch Bacani, programme leader for the PSI. No such disclosure requirement pertains to the PSI’s supporting institutions.
PSI signatories also face an annual fee based on gross premiums, revenue for intermediaries and other insurance service providers (agents, brokers), and total assets. The PSI’s next AGM will take place in Beijing this November where the Board is expected to unveil its strategy and work programme.
The PSI’s four principles (Link)
1. Embed ESG in decision-making
2. Work together with clients and business partners to raise awareness of ESG issues and “manage risk and develop solutions”.
2. Work with governments, regulators and other stakeholders to promote widespread action across society on ESG issues.
4. Disclosure of progress in implementing the Principles.