We are at a unique turning point for nature. COP15 [1] is expected to deliver the Global Biodiversity Framework (GBF), a global framework for jointly safeguarding nature and securing our common future. During COP15, signatories of the UN Principles for Sustainable Insurance (PSI) [2], together with other peers from the finance industry, have called on world leaders to agree on a global economic plan for halting and reversing nature loss. This article explores the role of insurers in supporting this goal and the work that UNEP FI has done so far to explain the links between nature and the insurance industry’s risk management, insurance and investment activities.

As risk managers insurers and investors, the insurance industry has an ever-increased responsibility to assess and raise awareness about nature-related risks and opportunities. It also has a significant role to play in embedding nature-related issues into their business decisions and a great potential for innovation in risk assessment, risk reduction and development of new insurance products.

Nature has been an integral part of UNEP FI’s insurance agenda since the inception of the Principles for Sustainable Insurance a decade ago. Throughout the years, the PSI has supported the implementation of pioneering global insurance industry guidance, including: (a) The guide developed by the PSI, WWF and UNESCO to protect World Heritage Sites. (b) The guide developed by the PSI to tackle the risks of plastic pollution, marine plastic litter and microplastics, and exploring further work in specific insurance lines and/or asset classes. (c) The guide developed by the PSI and Oceana to tackle illegal, unregulated and unreported fishing; and, (d) The global report on harnessing environmental pollution liability insurance for a sustainable economy.

In 2021, the global agenda for Nature-Positive Insurance was set during the pioneering webinar series: “ Nature-Positive Insurance: How the insurance industry can help achieve the global goal of nature positive by 2030 ”, convened by the PSI and the UN Convention on Biological Diversity (CBD). The series highlighted the key role of insurers while discussing the latest science on the state of nature, why nature and climate change are interrelated issues, the goals of the UN Convention on Biological Diversity, the UN Biodiversity Conference (COP15), why we need a Post-2020 Global Biodiversity Framework, and the links between the Task Force on Nature-related Financial Disclosures (TNFD) and the Task Force on Climate-related Financial Disclosures (TCFD).

Earlier this year, during the 10th Anniversary Event of the PSI , UNEP’s Executive Secretary, Inger Andersen challenged the insurance industry to implement six key asks to drive progress towards a just transition to a net-zero and nature-positive economy in order to achieve a resilient and sustainable future for all. During her intervention she highlighted that “insurers should commit to science-based nature-positive strategies and targets for their insurance and investment portfolios”. She also called for the PSI to “establish a Nature-Positive Insurance Alliance – just like the Net-Zero Insurance Alliance that it established in 2021 ­– particularly given the expected adoption of the Post-2020 Global Biodiversity Framework”.

Following these important developments, the PSI aims at developing a White Paper on Nature-Positive Insurance, which will further the understanding of the links between nature and the insurance industry’s risk management, insurance and investment activities and will serve as a basis for the establishment of a Nature-Positive Insurance Alliance in 2023.

PSI members have also started actively supporting and engaging in the development of the Taskforce on Nature-related Financial Disclosures (TNFD). UNEP FI is testing the current draft version of the TNFD framework with over 40 global financial institutions. The insurance sector is represented by 5 institutions from 4 different countries, with each bringing on board diversified teams across investment, climate risk, research and risk management to integrate nature-related risks and dependencies in their internal risk assessment. The complementarity of these teams showcases the robust understanding of risk management and prevention brought by the insurance industry when tackling global challenges.

PSI signatories can leverage from their peers’ previous experience of piloting the TCFD recommendations and their experience with climate scenario analysis in assessing and understanding their nature-related risks and dependencies.

While all these initiatives are building momentum, we need more collective and urgent action by the insurance industry. Biodiversity loss threatens our ability and the ability of future generations to live and thrive in a healthy, peaceful and prosperous world. Racing to 2030, today is the most critical period for the world to achieve the goal of Nature Positive and alongside other non-state actor, insurers will have a major role to play in the implementation of the global Biodiversity Framework.

[1] The Biodiversity Conference to the UN Convention on Biological Diversity (COP 15) held 7 – 19 December 2022 in Montréal under the presidency of the People’s Republic of China

[2] Signatories of the Principles for Sustainable Insurance who signed the COP15 Statement from the Private Financial Sector include: Achmea, Allianz France, ASR Nederland, AXA Group, CNP Assurances, Hellenic Hull Management, MS&AD Insurance Group Holdings, Inc., SCOR SE, SOMPO Holdings and Tokio Marine Holdings Inc.