More US insurance companies than ever are reporting their climate-related financial risks, according to a new report by Ceres, but the quality of disclosure remains deeply insufficient.
The report stated that the vast majority of US carriers fall far short of the substantive decision-useful reporting that regulators, investors, and policyholders want.
Eighty-three point two per cent of insurers now address all four TCFD pillars, yet only 10.5% of individual datapoints assessed across those pillars have achieved ’fully met’ status.
Metrics and targets is the most critically underdeveloped pillar, with 81.9% of datapoints rated ‘not found.’ This includes near-complete absence of indirect emissions reporting, virtually no internal carbon pricing, and failure by most carriers to quantify the share of assets subject to material physical risk.
Furthermore, 51.7% of all assessed datapoints were rated ‘not found’, and 37% were rated ‘partially met’—meaning fewer than one in nine disclosures meets TCFD’s substantive requirements.
Despite the increase in extreme weather events, pillar-level quality scores have remained essentially frozen for four years.
Ninety-one per cent of carriers received a ‘not found’ rating specifically on indirect emissions disclosure—even though indirect emissions typically represent over 90% of an insurer’s total carbon footprint.
Climate-linked executive compensation remains virtually non-existent, with only 8.5% ‘fully met’ and 66% ‘not found’ across the governance pillar.
The report analyses disclosures from 537 insurance groups submitted to the National Association of Insurance Commissioners’ (NAIC) Climate Risk Disclosure Survey for reporting year 2024. This is the fourth consecutive year that Ceres has produced this analysis.
