At the 2024 UN Climate Change Conference (COP2z) in Baku, the United Nations-convened Forum for Insurance Transition to Net Zero (FIT) unveiled the first-ever global guide on transition plans for insurance companies.
The launch marks a key milestone in the global effort to accelerate a just, resilient transition to a net-zero economy. Insurance companies play a key role in managing risks and supporting sustainable practices.
Established in April 2023, the FIT fosters global collaboration among insurers, regulators, and stakeholders to support a just net-zero transition.
The forum is chaired by the UN Environment Programme (UNEP) and currently comprises nearly 50 organizations worldwide.
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The FIT’s inaugural report, “Closing the Gap: The Emerging Global Agenda of Transition Plans and the Need for Insurance-Specific Guidance”, provides the first comprehensive roadmap for insurance companies to develop credible transition plans.
The report also outlines key features of insurers’ portfolios, emphasizing sustainability risks and opportunities for transition planning. It highlights the insurance industry’s role as risk managers, carriers, and investors in supporting a resilient, net-zero economy.
Butch Bacani, UNEP Head of Insurance & FIT Chair, “The unprecedented global transition to a resilient net-zero economy requires insurance companies to adapt their business models and strategies to reduce risks, seize opportunities; and support economic, social and environmental sustainability. This requires a credible transition plan.”
He added, “The FIT’s inaugural report provides a first-of-its-kind global roadmap to ensure the development and delivery of credible insurance company transition plans that are fit for purpose—plans that turn climate ambition into climate action.”
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The report also highlights the evolving policies and regulations surrounding corporate transition plans.
Many countries and jurisdictions now mandate the disclosure of climate-related impacts, risks, and opportunities. EU regulations like the CSRD and CSDDD require transition plans, setting a precedent for other regions to follow.
Looking ahead, the FIT plans to release additional guidance to support insurance companies in developing and disclosing credible transition plans. The second deliverable of the FIT Transition Plan Project will provide more detailed recommendations for insurers’ underwriting portfolios.
The final deliverable will offer a comprehensive framework, integrating underwriting and investment portfolios for a total balance sheet approach.
The FIT welcomed its first supporter, the Brazilian Insurance Confederation (CNseg), expanding its reach. CNseg, a long-time UNEP partner, joins as Brazil prepares to host COP30 in Belém, highlighting the importance of international partnerships for driving climate action in the insurance sector.
It supports UNEP’s collaboration with the insurance industry to accelerate a just net-zero transition, addressing climate change, nature loss, and pollution for a sustainable future. Through the FIT, UNEP strengthens its partnership with the insurance sector to tackle climate and sustainability challenges.
The FIT’s guidance will help the insurance industry implement transition plans, turning climate ambitions into action.