Share of investments managed by German insurers based on ESG criteria rises to 88%

Written by Adam Cadle

01/12/2022

The share of investments managed by German insurance companies based on ESG criteria has increased to 88% up to 82% in 2021, according to latest figures published by the German Insurance Association (GDV).

Insurance companies accounting for 85% of total investments made by the industry have aligned their investment decisions with the net-zero goal and insurers accounting for 90% of investments are signatories to the UN Principles of Responsible Investment. Companies representing 51% of investment are members of the Net-Zero Asset Owner Alliance (NZAOA).

In 2021, investments in more than 1600 renewable energy projects yielded a reduction of emissions by 8.6 million metric tons of CO2, up from 4.6 million tons in 2020. Green bond investments amounted to 1.1% of total investments in 2021 (after 0.7% in 2020).

In early 2021, German insurers published their first roadmap for companies to become climate neutral. The industry’s sustainability positioning primarily aims to achieve four goals: net-zero carbon emissions for the sector’s €1.8trn worth of investments by 2050; eventually no more underwriting of commercial or industrial risks where clients or business partners don't actively contribute to a sustainable economy; more sustainable insurance products; and net-zero business processes in insurance operations by 2025.

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