Publication of the insurance sector’s 3rd Baromètre ESG-climat: insurers place 61 billion in green investments in 2018 and bolster their coal disinvestment strategies
Taking the opportunity of Climate Finance Day 2019, to be held on 29 November in Paris, French insurers and reinsurers are wholeheartedly renewing their commitment to fighting global warming. The third edition of their Baromètre ESG-climat (Environmental, social, governance and climate barometer), published today, shows that the sector made significant progress in responsible investment in 2018. In addition, in keeping with the commitment it made on 2 July 2019, the FFA is passing on new NGO recommendations for defining a coal strategy.
Published for the first time in 2017, each year the insurance sector Baromètre ESG-climat reports on how insurers and reinsurers are integrating environmental, social and governance (ESG) criteria into their investment strategies. This monitoring forms part of the day-to-day work done at the FFA to spur insurers’ responsible investor approach and to share good practice.
The third edition of the Baromètre ESG-climat, published today, shows that overall the sector has progressed by 12 points in one year for all the five criteria monitored in the study, reaching an "advanced maturity" level. By the end of 2018, green investments held by insurers reached 61 billion euros, compared with 49 billion in 2017. To that we can add the responsible, green and social-solidarity units in life insurance funds, which represented investments of nearly 8 billion in 2018, including 5.4 billion with the ISR label, 540 million with the GreenFin label, 270 million with the Finansol label and 1.7 billion awarded other European labels (LuxFlag, FNG, Umweltzeichen).
In 2018 the companies in the sector made equally good progress in making their responsible investment strategies transparent and easy to understand. Today they exercise greater vigilance over the management companies that look after their assets and systematically include the ESG criteria in all their asset management and selection processes. Most of those companies are now developing training for their distribution networks and information initiatives with their customers.
To Florence Lustman, President of the FFA, "The progress shown by the 2019 Barometer is testimony to insurers' strong commitment to the climate. An approach that means we can also better serve customers who increasingly want to save in a meaningful way".
On 2 July 2019, the FFA signed a joint declaration for sustainable green finance, alongside the leading representatives of the Paris financial centre. In that document, seven professional bodies and associations undertook to encourage their members and others to define strategies for disinvesting from coal-fired power. The principal French insurers, representing more than 90% of assets under management in the sector, have already adopted a coal disinvestment strategy.
To speed up the shift from coal, on the occasion of Climate Finance Day 2019, the FFA is publishing new "recommendations for defining a coal strategy". This document surveys a series of measures recommended by NGOs to strengthen the strategies of insurers and reinsurers seeking to disinvest from coal. One of the main measures aims to define the timetable for disinvestment set by each player.
"The strategies for moving away from coal are a further example of the efforts insurers are making to bring their investments into line with the Paris Agreement", said Florence Lustman.