ClientEarth response to the UNEP FI PSI Consultation Underwriting environmental, social and governance risks in non-life insurance business

ClientEarth argues that the PSI Guide must explicitly distinguish between reputational ESG risks and financially material risks, such as climate change, to ensure insurers do not adopt approaches less stringent than those required by law. The response highlights that regulators like the UK Prudential Regulatory Authority (PRA) and EIOPA already integrate sustainability risks into risk management frameworks, making board-level oversight and specific responsibility allocation a legal necessity rather than an optional best practice. ClientEarth further suggests that certain high-polluting sectors, such as coal and tar sands, should be managed through straightforward exclusion policies rather than ESG frameworks. Additionally, the document critiques the PSI's risk heat maps for underestimating the climate risks associated with agriculture, livestock, and real estate.

• The PSI Guide should clearly differentiate between ESG risks that are merely reputational and those that are financially material, as the latter may trigger legal requirements for inclusion in mainstream risk frameworks.
• There is a risk that the Guide may propose risk management approaches that are less stringent than legal requirements, which could confuse industry participants and undermine financial regulators.
• ClientEarth recommends that the Guide be complemented by exclusion policies for sectors that cannot be insured responsibly, specifically mentioning cluster bombs, coal, and tar sands.
• The Guide's suggestion that board engagement is 'advisable' is viewed as overly permissive, as regulators like the UK PRA require clear board roles and responsibilities for managing financial climate risks.
• ClientEarth critiques the PSI heat maps for assigning low risk ratings to climate change in the agriculture, livestock, and real estate sectors despite evidence of material financial impacts.

APA

ClientEarth (2019). ClientEarth response to the UNEP FI PSI Consultation Underwriting environmental, social and governance risks in non-life insurance business. https://www.clientearth.org/media/sgcdkpld/final-clientearth-response-to-unep-psi-consultation-30-6-19.pdf

Chicago

ClientEarth. ClientEarth response to the UNEP FI PSI Consultation Underwriting environmental, social and governance risks in non-life insurance business. 2019. https://www.clientearth.org/media/sgcdkpld/final-clientearth-response-to-unep-psi-consultation-30-6-19.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=ClientEarth response to the UNEP FI PSI Consultation Underwriting environmental, social and governance risks in non-life insurance business |date=June 2019 |url=https://www.clientearth.org/media/sgcdkpld/final-clientearth-response-to-unep-psi-consultation-30-6-19.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2019clientearth, author = {{ClientEarth}}, title = {{ClientEarth response to the UNEP FI PSI Consultation Underwriting environmental, social and governance risks in non-life insurance business}}, publisher = {ClientEarth}, year = {2019}, month = jun, url = {https://www.clientearth.org/media/sgcdkpld/final-clientearth-response-to-unep-psi-consultation-30-6-19.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }