New Delhi: On Finance Day at COP29, the United Nations Development Programme (UNDP) released a report urging insurance supervisors to take proactive measures to guide the insurance sector’s transition to a sustainable economy. The report, “Supervisory Thinking on Insurance-related Climate Transition Plans,” provides insurance supervisors with insights and recommendations for developing regulatory guidance for insurers’ climate transition plans, a press release by the agency stated.
The report highlights that while insurance supervisors recognize the importance of transition plans, most are still in the early stages of developing specific requirements and guidance. It identifies challenges in formulating supervisory requirements, including uncertainties surrounding the roles of financial regulators and supervisors, data adequacy and accessibility issues, and the lack of internationally standardized guidance.
The report emphasizes that supervisors can support insurers’ progress towards net-zero by providing clear guidance on metrics, enhancing capacity building, and improving access to relevant data.
Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau of Policy and Programme Support emphasized that the role of supervisors is paramount as they begin addressing the complexities of transition planning. “By providing clear direction, enhancing data transparency, and fostering collaboration, supervisors can create an environment conducive to the development of credible transition plans.”
The report recommends that insurance supervisors enhance coordination among authorities, advocate for an international baseline and consistent global guidance, assist regulated entities in overcoming data-related challenges, and collaborate with the insurance sector on capacity-building initiatives.
Daniel Wang, Chair of the UNDP’s Sustainable Insurance Forum, stressed the leadership role of insurance supervisors in collaborating with the insurance industry to achieve a net-zero economy. “The collective progress made now will contribute to a sustainable future,” he stated.