A group of insurance supervisors and regulators have released a joint statement supporting the adoption of a global standard for climate disclosure.
They make up the Sustainable Insurance Forum (SIF), which has welcomed the recommendations and guidance of the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD).
The group includes the California Department of Insurance, the Bank of England Prudential Regulation Authority and the Monetary Authority of Singapore.
The SIF says climate disclosure within the insurance sector is hugely important to accurately forecast and manage risks and suggests it will prove instrumental in ensuring the protection of policyholders, the resilience of insurance firms and the stability of the industry as a whole.
The group adds supervisors can play a role in supporting the adoption of the new standard by raising awareness of the recommendations amongst other firms, sharing knowledge and tools within the industry and incorporating relevant insights from climate disclosures into their routine activities.
California Insurance Commissioner Dave Jones said: “As a financial regulator, I believe it is important that financial institutions, including insurance companies, recognise and address potentially significant climate risks facing their investments in coal, oil and gas and utilities.
“The TCFD sets a new global standard for disclosure by insurance firms – which can help supervisors and regulators assess how insurance companies are addressing climate related risks and opportunities across underwriting and investment.”