Insurance regulators and supervisors from 16 jurisdictions around the world have jointly backed a set of recommendations on how companies in the sector should disclose the climate-related risks affecting their businesses.
A statement from the Sustainable Insurance Forum (SIF) – an international network of insurance supervisors and regulators – welcomed the recommendations and guidance from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).
At the end of June, the task force released its final recommendations report – a voluntary framework for companies and investors to report climate-related information in their financial filings.
This week, insurance supervisors belonging to the SIF – including De Nederlandsche Bank, the UK’s Prudential Regulation Authority, and France’s Autorité de Contrôle Prudentiel et de Resolution – said a “growing number of insurance supervisors are now taking action to respond to climate-related risks to the sector, with disclosure being a core focus”.
The statement came at the end of the forum’s second meeting in Windsor, UK. On behalf of supervisors and regulators in 16 jurisdictions, the SIF pinpointed four ways they played a role in supporting the uptake by companies of the recommendations.
These included raising awareness of the TCFD and supporting “appropriate aspects” of its advice as a best practice to be considered by insurers in their financial disclosures.
The SIF also proposed “working with market actors to build capacity and share tools, including for the development of scenarios and metrics”, and “incorporating relevant insights from climate disclosures into routine supervisory activities”.
In the statement, the group described climate change as one of the most serious long-term challenges for the insurance sector and the wider financial system.
The signatories said that as risk managers, risk carriers, and investors insurance companies played “a cornerstone role” in the management of climate-related risks and opportunities.
Dave Jones, California Insurance Commissioner, said: “As a financial regulator, I believe it is important that financial institutions, including insurance companies, recognise and address potentially significant climate risks facing their investments in coal, oil and gas, and utilities.”