UNEP FI’s Principles for Sustainable Insurance
UNEP FI developed the Principles for Sustainable Insurance (PSI) to support a change towards sustainable finance. The PSI is a framework for the insurance industry, primarily for investment management.
- We will embed in our decision-making environmental, social and governance issues relevant to our insurance business.
- We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.
- We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.
- We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.
Once a company has signed up to the Principles, they are free to decide which actions to implement. There are possible actions under each principles, but these are examples of what a company could do. A signatory may choose to implement other actions depending on its business model and other circumstances, such as geography.
Should a company sign up to the Principles and then not fulfil any actions, it risks reputation but implementing the principles is considered “a work in progress’ rather than a requirement by law. However, the Board of the PSI Initiative does however reserve the right to delist any organisation should it not fulfil any requirements.
The PSI relies on signatories being transparent about their activity and relied on a process of self-disclosure.
There are 70 organisations that have signed to PSI the principles and there are $8 trillion in assets under management.
The UNEP FI was founded in 1992 at the Earth Summit in Rio and is based in Geneva, Switzerland. It’s has over 200 members who have signed the UNEP FI Statement of Commitment, including public and private financial institutions from around the world.
PSI was founded in 2012 and launched at the UN Summit on Sustainable Development and is part of the insurance industry criteria of the Dow Jones Sustainability Indices and FTSE4Good.
As a global framework, the PSI are aligned with and complement the aims of the UN Global Compact Principles and the Principles for Responsible Investment (PRI). However, there is no obligation for signatories of the PSI to sign the PRI or the UN Global Compact Principles, and vice-versa.
UNEP FI is funded by the European Commission in partnership with the International Corporate Governance Network (ICGN) and the European Federation of Financial Analysts Societies (EFFAS). There is also an annual fee for signatories.
Compliance to the UNEP FI Principles is not required - rather than legal regulations or set of criteria, the frameworks provide a set of guidelines for behaviour.