UNDP’s SIF Report Highlights Insurance Sector’s Role in Climate Transition

The UNDP’s Sustainable Insurance Forum (SIF) unveiled a critical report, Supervisory Thinking on Insurance-related Climate Transition Plans on Finance Day at COP29 in Baku, Azerbaijan. This report provides valuable guidance for insurance supervisors navigating the complexities of the global transition to a net-zero economy.

The report highlights that while insurers’ climate transition plans are essential for effective risk management, most supervisory authorities are still in the early stages of formulating clear regulatory requirements. Challenges in this process include uncertainties about the roles of regulators, limited access to high-quality data, and the absence of internationally standardized frameworks.

Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau of Policy and Programme Support, called for urgent action, stating that insurance supervisors must take proactive measures to support the transition. He emphasized the importance of providing clear guidance, improving data transparency, and fostering collaboration to ensure credible and actionable transition plans.

The report also underscores the critical role supervisor’s play in enabling insurers to meet net-zero targets. By aligning frameworks, sharing best practices, and enhancing capacity-building initiatives, supervisors can help overcome existing barriers and create an environment conducive to sustainable progress.

Daniel Wang, Chair of UNDP’s SIF, stressed the importance of collective action, noting that the efforts made today will shape a more resilient and sustainable financial system for the future. He acknowledged the complexities of the journey but expressed optimism about the transformative potential of strong supervisory engagement.

The report calls for greater international coordination and collaborative efforts to address challenges such as data adequacy and regulatory alignment. It provides a roadmap for supervisors to lead the insurance industry toward a more sustainable future.