ACPR publishes first report on climate change risk governance

Written by Adam Cadle

28/02/2022

French supervisory authority, ACPR, has published its first report on the governance of climate change risk in the insurance sector.

The report, which mobilised 21 insurance and reinsurance groups as well as three professional federations, summarises the industry’s best practices to address climate change risks. It underlined the progress made since a first analysis was conducted in 2019 and provides institutions with a working base to better integrate climate change risks.

The management of climate change risk, according to the authority, is organised around four key lines of action:
- Rolling out a long-term strategy with intermediate steps to reach a carbon neutral commitment by 2050;
- Using tools, ESG data and monitoring indicators to steer the activity;
- Adapting the internal organisation so as to give a strategic and cross-cutting role to climate risk management;
- Mobilising the climate risk expertise of insurers so that they can raise their policyholders’ awareness as well as that of the companies they invest in.

“The report is a first step,” it said. “Naturally, there is room for improvement, especially regarding data reliability and the use of forward-looking climate scenarios such as those of the NGFS (the Paris-based Network of Central Banks for Greening the Financial System). The ACPR will continue its work in 2022 with a particular focus on issues related to insurers’ liability risk management.”

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