Insurers make protecting the foundations of human life and our economy a priority

Germany's insurers intend to make a bigger contribution to safeguarding the environmental foundations of human life and the economy. Protecting biodiversity is to be a priority both in making investments and in underwriting risks. That is one of the key aspects of the updated sustainability positioning by the German Insurance Association (GDV). Two years after first passing that positioning, the Presiding Board decided to make an update.

“Our sustainability roadmap has been an important first step,” said Jörg Asmussen, CEO of the German Insurance Association (GDV). “Now it is time to set our sights on the next set of goals: we make protecting the environment and biodiversity a priority, and we are going to define specific milestones for investment portfolios. This is how we as an industry with great importance contribute to a successful transformation of business and society. 

Here are the key updates in the GDV's sustainability positioning: 

• Both when making investments and when underwriting risks, insurers intend to make sure the environmental foundations of human life and the economy are being protected in the future, particularly regarding areas that are worth protecting and business activities that put a significant strain on natural resources.
• GDV member companies are to define specific, quantifiable interim carbon reduction targets for their investment portfolios. The Net Zero Asset Owner Alliance’s (NZAOA) ambitious Target Setting Protocol that is being revised on a regular basis will serve as a frame of reference. Accordingly, the carbon footprint of stocks and listed corporate bonds is to be reduced by 49 to 65 percent by 2030, for example.^[1] The GDV will continue to disclose emissions in the annual sustainability reports.
• In risk underwriting insurers support the transformation of the economy towards climate neutrality – based on scientific insights – by contributing their expertise and providing specific solutions. Debates about methods and metrics to measure the insured greenhouse gas emissions are already underway on an international level. The insurance industry actively participates in these debates to be able to disclose its progress in a transparent manner.
• Regarding insurers' own operating business processes, ambitious reduction targets for indirect emissions (scope 3) are to be reached by 2030. We thereby double down on our collective efforts; up until now, the reduction targets set out in the positioning only referred to emissions directly produced by the companies and by purchased energy (scope 1 and 2).
• Even companies that are not legally required to do so, are to increase the share of women in executive positions and management bodies.
• GDV member companies are to support their independent distribution partners in reaching their sustainability targets.

According to a resolution passed by the GDV Presiding Board, the sustainability positioning first published in January 2021 must be reviewed every two years. This year's update was made based on companies’ implementation experience, the 2022 sustainability report and the ongoing public debate. The current resolution of the Presiding Board is based on the deliberations of a working group, that developed its recommendations in the second half of 2022.

^[1] The IPCC AR & WG III report containing the updated Target Setting Protocol is expected to cause slight changes to the NZAOA's decarbonisation strategy.