For years, sustainability professionals have treated insurance as a line item \u2014 something handled by finance, filed under \u201ccost of doing business.\u201d That\u2019s a mistake.<\/p>\n
In our recent \u201cTwo Steps Forward\u201d podcast episode, Solitaire Townsend and I spoke with Linda Freiner, group chief sustainability officer at Zurich Insurance Group. The conversation made it clear that insurance isn\u2019t peripheral to sustainability. It is, in many ways, the operating system beneath it.<\/p>\n
Insurance, after all, is about pricing the future. And right now, the future is anything but predictable.<\/p>\n
I was reminded of a story I covered more than two decades ago: The insurance industry can either react to climate risk \u2014 or proactively shape it. That tension still defines the moment. But what\u2019s changed is the scale, speed and interconnectedness of the risks we\u2019re facing.<\/p>\n
An enabler, not a brake<\/p>\n
Freiner frames insurance not as a brake on risk-taking but as an enabler. Without it, businesses don\u2019t launch, infrastructure doesn\u2019t get built and innovation doesn\u2019t scale. Insurance is the social safety net that allows the economy to function \u2014 and, increasingly, to transform.<\/p>\n
But here\u2019s the catch: The model is under strain.<\/p>\n
Climate change is turning the unprecedented into the routine. Historical data \u2014 the backbone of underwriting \u2014 is no longer a reliable guide. And yet, thanks to advances in modeling and climate science, insurers are getting better at looking forward. The question is whether that will be enough.<\/p>\n
Because rising risk leads to rising premiums. And at some point, the math stops working.<\/p>\n
Freiner is blunt about the solution: If we want insurance to remain affordable, we have to reduce risk. That means not only decarbonizing, but also adaptting. Not either\/or \u2014 both.<\/p>\n
Risks and sustainability failures<\/p>\n
This is where the sustainability conversation has been incomplete. For a decade, CSOs have focused heavily on transition risk \u2014 net zero targets, emissions reductions, carbon accounting. Meanwhile, physical risk \u2014 the floods, fires and heatwaves already here \u2014 has often been left to risk managers and insurers.<\/p>\n
That delineation no longer holds.<\/p>\n
If your factory floods or your supply chain collapses due to extreme weather, that\u2019s not just an operational issue; it\u2019s a sustainability failure. And it\u2019s one that can derail even the most well-crafted transition plan.<\/p>\n
Freiner\u2019s message to CSOs is clear: Resilience needs to be embedded into sustainability strategy, not bolted on as an afterthought.<\/p>\n
What\u2019s striking is how systemic this all is. Insurance sits at the intersection of underwriting, investment and advisory services. It doesn\u2019t just price risk \u2014 it helps shape behavior. From incentivizing electric vehicles to funding green bonds to developing parametric insurance for vulnerable communities, insurers are quietly influencing how the transition unfolds \u2014 and at what pace.<\/p>\n
And yet, most sustainability leaders aren\u2019t engaging with them deeply.<\/p>\n
Seeing the data<\/p>\n
They should be. Insurers may have the best view of climate risk anywhere in the economy \u2014 arguably better, as Soli noted, than even the Intergovernmental Panel on Climate Change in some cases. They see the data. They model the scenarios. They understand where the system is breaking.<\/p>\n
The irony is that sustainability professionals \u2014 whose job is to manage long-term risk \u2014 often aren\u2019t fully leveraging the institutions built to do exactly that.<\/p>\n
Freiner also brings a welcome dose of realism to the net zero conversation. Targets, she says, are a \u201cNorth Star\u201d \u2014 necessary but insufficient. The path is messy, dependent on external factors, and often beyond any one company\u2019s control. What\u2019s needed now is more honesty about that complexity.<\/p>\n
That may be the most important takeaway.<\/p>\n
We\u2019re entering a phase where sustainability is less about aspiration and more about navigation \u2014 through uncertainty, trade-offs and real-world constraints. And in that world, insurance isn\u2019t just relevant. It\u2019s essential.<\/p>\n
The Two Steps Forward podcast is available on\u00a0Spotify<\/a>,\u00a0Apple Podcasts<\/a>,\u00a0YouTube<\/a>\u00a0and other platforms \u2014 and, of course, via\u00a0Trellis<\/a>. Episodes publish every other Tuesday.<\/p>\n","protected":false},"excerpt":{"rendered":"For years, sustainability professionals have treated insurance as a line item \u2014 something handled by finance, filed under…\n","protected":false},"author":2,"featured_media":45370,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[128],"tags":[244,26112,7203,219],"class_list":["post-45369","post","type-post","status-publish","format-standard","has-post-thumbnail","category-zurich-insurance","tag-insurance","tag-podcast","tag-risk","tag-zurich-insurance"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116363939329188634","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/45369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=45369"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/45369\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/45370"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=45369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=45369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=45369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}