The Science Based Targets initiative (SBTi), which launched in 2020 with greenhouse gas metrics and target-setting methodology aimed at the investment and lending communities, has published a new industry brief as a first step towards the development of a net-zero insurance standard, noting that guidance for insurance underwriting lags behind the substantial work underway elsewhere in the financial sector.

Citing the industry's roughly US$6.8 trillion in premium volume, US$35 trillion in global assets under management and expertise in risk management, SBTi flags (re)insurance as a critical enabler of the transformation necessary to reach a net-zero economy.

The "Industry Brief for the SBTi Financial Institutions Net-Zero Insurance Standard (Underwriting Portfolios)" provides background information on different approaches and potential methods for setting science-based targets to decarbonize insurance underwriting portfolios, in line with a 1.5°C pathway and SBTi’s existing target-setting framework for financial institutions. As such, the Brief aims to provide a background on approaches and potential methods for setting a science based target (SBT) to disclose, reduce, and transition activities contributing to an re/insurer's underwriting portfolio and claims-related emissions. The Brief outlines next steps SBTi intends to take to develop a standard for addressing such emissions.

The full Brief is available at https://sciencebasedtargets.org/resources/files/SBTi-Insurance-Industry-Brief-Publication.pdf.

Source: SBTi, https://sciencebasedtargets.org