The Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD) released its final recommendations last June. The report was well received by the financial community and received support from over 100 businesses.

In a statement from leading insurance supervisors, the Sustainable Insurance Forum particularly welcomed “the specific guidance for insurance firms as underwriters and asset owners [which] will help drive convergence in reporting, enabling comparison across the sector. The SIF appreciates the forward-looking orientation of the TCFD recommendations, and specific guidance on scenario analysis. Scenario analysis is a critical tool to understand how the insurance sector could be impacted by both physical climate impacts as well as the transition to a low-carbon and climate resilient economy.”

The SIF identifies four key areas where supervisors play a role in supporting uptake, and thereby strengthen insurance markets:

  1. By raising awareness of the TCFD recommendations among regulated firms.
  2. By working with market actors to build capacity and share tools, including for the development of scenarios and metrics.
  3. By incorporating relevant insights from climate disclosures into routine supervisory activities.
  4. Finally, by supporting the Task Force recommendations, or appropriate aspects of it, as a best practice to be considered by insurers in their financial disclosures.

California Insurance Commissioner Dave Jones said: “As a financial regulator, I believe it is important that financial institutions, including insurance companies, recognize and address potentially significant climate risks facing their investments in coal, oil and gas and utilities. The TCFD sets a new global standard for disclosure by insurance firms – which can help supervisors and regulators assess how insurance companies are addressing climate related risks and opportunities across underwriting and investment. Going forward, the department will seek to integrate aspects of the TCFD recommendations into its existing regime.”

Hassan Boubrik, President of the Autorité de Contrôle des Assurances et de la Prévoyance Sociale (ACAPS) in Morocco, said: “Disclosure by financial institutions is one of the five key pillars of Morocco’s national Roadmap for aligning the financial sector with sustainable development. We are now trying to implement this into the insurance sector – and the Forum provides a valuable opportunity to share knowledge and learn from our supervisor peers in other countries.”

 

Read the Statement


The Sustainable Insurance Forum (SIF) is a network of insurance supervisors and regulators from around the world who are working together on the sustainability challenges facing the business of insurance. It serves as a global platform for knowledge sharing, research and collective action.

The SIF was launched in December 2016 by the UN Environment Programme, drawing together its Inquiry into the Design of a Sustainable Financial System and the Principles for Sustainable Insurance (PSI). It is now taking forward a six-track work programme in 2017.