The Sustainable Insurance Forum (SIF) – a global network of insurance supervisors and regulators working together to strengthen their response to relevant sustainability challenges – has released a statement welcoming the recommendations and guidance of the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD).
During its second meeting in July 2017 in Windsor, UK, the SIF discussed the importance of climate disclosure within the insurance sector. They also identified how enhanced disclosure can support insurance supervisors in their efforts to ensure the protection of policyholders, the safety and soundness of insurance firms and the stability of the insurance sector as a whole.
In this joint statement on behalf of supervisors and regulators in 16 jurisdictions, the SIF identifies four key areas where supervisors play a role in supporting uptake, and thereby strengthen insurance markets:
- By raising awareness of the TCFD recommendations among regulated firms.
- By working with market actors to build capacity and share tools, including for the development of scenarios and metrics.
- By incorporating relevant insights from climate disclosures into routine supervisory activities.
- Finally, by supporting the Task Force recommendations, or appropriate aspects of it, as a best practice to be considered by insurers in their financial disclosures.
California Insurance Commissioner Dave Jones said: “As a financial regulator, I believe it is important that financial institutions, including insurance companies, recognize and address potentially significant climate risks facing their investments in coal, oil and gas and utilities. The TCFD sets a new global standard for disclosure by insurance firms – which can help supervisors and regulators assess how insurance companies are addressing climate related risks and opportunities across underwriting and investment. Going forward, the department will seek to integrate aspects of the TCFD recommendations into its existing regime.”
Hassan Boubrik, President of the Autorité de Contrôle des Assurances et de la Prévoyance Sociale (ACAPS) in Morocco, said: “Disclosure by financial institutions is one of the five key pillars of Morocco’s national Roadmap for aligning the financial sector with sustainable development. We are now trying to implement this into the insurance sector – and the Forum provides a valuable opportunity to share knowledge and learn from our supervisor peers in other countries.”
Nick Robins, Co-Director of the UN Environment Inquiry, said: “This statement illustrates the value of financial authorities coming together across jurisdictions to address pressing issues of common concern – such as climate change. Members and participants in the SIF have set an ambitious agenda for promoting uptake of the TCFD recommendations as a new global standard for disclosure.”