Gimar special topic edition the impact of climate change on the financial stability of the insurance sector

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5.1.2 Other initiatives
Other initiatives aim to support institutions in 
assessing the alignment of their portfolios with 
various climate scenarios and with the Paris 
Agreement. Such tools also provide insight 
on possible transition risks associated with 
a disruptive shift to a low-carbon economy. 
Examples include the Paris Agreement Capital 
Transition Assessment tool
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or the Science
Based Targets initiative.
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Various financial 
institutions including insurers are using these
tools in their own analysis or to support TCFD-
aligned disclosures.
The United Nations Environment Programme 
Finance Initiative has various initiatives to 
support sustainable investments. These include 
the Principles for Responsible Investment 
(PRI), a voluntary and aspirational set of 
investment principles that offer possible actions 
for incorporating environmental, social and 
governance (ESG) issues into investment practice. 
Since the launch of the PRI in 2006, over 3 000 
investors have signed on. In September 2019, 
a further step was taken by setting up the Net-
Zero Asset Owner Alliance, a group of institutional 
investors setting and reporting on targets for 
net-zero GHG emissions by 2050. At the time of 
writing, the 37 institutional investors that are part 
of the alliance, including 15 insurers, represent 
around US$5.7 trillion assets under management.
5.2 SUPERVISORY MEASURES
5.2.1 IAIS initiatives 
To support awareness around, and implementation 
of, the TCFD recommendations, the IAIS and SIF 
published an Issues Paper on the implementation 
of the TCFD recommendations in February 2020.
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The Issues Paper assesses awareness of the 
TCFD recommendations and their implementation 
within the insurance sector, sets out a range 
of supervisory approaches to encourage 
implementation, and discusses the relevance of 
the TCFD Framework to IAIS supervisory material.
In May 2021, the IAIS and SIF published an 
Application Paper on the supervision of climate-
related risks in the insurance sector,
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providing 
guidance for supervisors to integrate climate-
related risks into their supervision. The sections 
on investment policy, risk management and 
disclosures are particularly relevant to the topic 
of this paper. The Application Paper includes 
recommendations and examples of good 
practice on the role of the supervisor, corporate 
governance and risk management, enterprise risk 
management for solvency purposes (including on 
scenario analysis and stress testing), investments, 
and disclosures.