Many insurance companies are keen to embrace more sustainable ways of investing their clients’ premiums, as combatting climate change grows in importance, and Covid-19 continues to dominate. As such, they are seeking strategies that embrace environmental, social and governance (ESG) factors.
What may be still missing though is how to make an impact in the process. This can be done by impact investing, which is defined as “investments in companies, organizations and funds with the intention of generating a social and environmental impact, alongside a financial return.”
And there are various ways of doing it, such as through thematic strategies covering issues such as climate change, to more bespoke vehicles that target the Sustainable Development Goals. These offerings are structured not only as ‘off-the-shelf’ investment funds, but also as customized segregated accounts. This means insurers can tailor the strategies according to their sustainability agendas.