Mind the Sustainability Gap

A CRO Forum report

A bridge over troubled water

The CRO Forum published a report about "Integrating sustainability into insurance risk management"


The importance of building resilient infrastructure and promoting inclusive and sustainable industrialisation as well as fostering innovation, is increasingly recognised. The role of the insurance industry in facilitating the proper functioning of the economy, as risk managers, risk carriers and investors, helps to deliver inclusive sustainable growth and is a fundamental part of an insurer’s business model.

This paper considers how the insurance industry – and in particular insurance sector Chief Risk Officers (CRO) and their colleagues – should respond to this evolving environment. It seeks to define a set of ‘industry best practice’ guidelines to manage the integration of sustainability into insurers’ risk management frameworks, to help practitioners when addressing questions such as:

  • What does sustainability mean for the insurance sector, from a risk perspective?
  • What does it mean in practice to integrate sustainability risks into risk management frameworks? How should conflicts of interest be addressed within these frameworks – e.g. between different stakeholder groups or across different lines of business?
  • How does an insurer identify the material risks and opportunities linked to sustainability and how could these be managed? How could scenario analysis and stress testing help?
  • What data and internal knowledge is needed, and how should uncertainty and data gaps be dealt with?
  • What is an appropriate time horizon over which to consider sustainability risks and how to reconcile the shorter-term business horizon with the longer-term horizon over which some of these risks crystallise (e.g. climate change)?
  • How should insurers measure progress in managing sustainability risks?

These guidelines should support CROs and their colleagues in articulating to both internal and external stakeholders that the sustainability risks affecting their business are understood, that measures are in place to mitigate these risks and that any associated limitations are clear and recognised.


About the CRO Forum

The CRO Forum focuses on developing and promoting industry best practices in risk management. Comprised of Chief Risk Officers from multinational (re)insurance companies, it aims to represent the members' views on key risk management topics, including emerging risks. It regularly publishes practice and position papers on timely risk management subjects.

The CRO Forum website


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