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🌍 '''Principles for Sustainable Insurance (PSI)''' is a global framework launched by the United Nations Environment Programme Finance Initiative (UNEP FI) that provides [[Definition:Insurance carrier | insurers]], [[Definition:Reinsurance | reinsurers]], and [[Definition:Insurance intermediary | intermediaries]] with a voluntary set of commitments for integrating [[Definition:Environmental, social, and governance (ESG) | environmental, social, and governance]] considerations into their core business activities. Adopted in 2012, the PSI framework recognizes that the insurance industry — as both a [[Definition:Risk management | risk manager]] and a major institutional investor — occupies a unique position to influence how societies prepare for and respond to sustainability challenges. Signatories commit to four principles covering ESG integration in decision-making, client and business partner awareness, government and regulator engagement, and transparency through public disclosure.

📋 In practice, adoption means embedding sustainability criteria across [[Definition:Underwriting | underwriting]], [[Definition:Product development | product development]], [[Definition:Investment management | investment]], and [[Definition:Claims management | claims]] operations. An insurer implementing PSI might decline to underwrite certain fossil fuel projects, develop [[Definition:Parametric insurance | parametric products]] for climate-vulnerable communities, or incorporate [[Definition:Climate risk | climate scenario analysis]] into its [[Definition:Enterprise risk management (ERM) | enterprise risk management]] framework. Signatories are expected to report publicly on their progress, and UNEP FI facilitates working groups on topics like [[Definition:Natural catastrophe | natural catastrophe]] resilience, human rights due diligence, and [[Definition:Sustainable development goals (SDGs) | SDG]]-aligned product innovation. The framework does not impose binding rules, but the peer accountability and stakeholder visibility it creates have made it a significant influence on industry norms.

🔑 The PSI framework matters because it provides a recognized structure at a time when regulators, [[Definition:Rating agency | rating agencies]], and investors are increasingly demanding that insurers quantify and disclose their sustainability exposure. Without a common reference point, ESG commitments risk becoming vague marketing language. PSI gives carriers a credible, internationally endorsed baseline against which they can measure progress and demonstrate intent. As [[Definition:Climate change | climate-related risks]] reshape [[Definition:Loss experience | loss patterns]] and [[Definition:Regulatory risk | regulatory expectations]] tighten — particularly in Europe under frameworks like the [[Definition:Solvency II | Solvency II]] sustainability disclosures — insurers that have already embedded PSI principles into their operations are better positioned to adapt. The initiative has grown to include hundreds of signatories representing a significant share of global [[Definition:Gross written premium (GWP) | premium]] volume.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Environmental, social, and governance (ESG)]]
* [[Definition:Climate risk]]
* [[Definition:Sustainable insurance]]
* [[Definition:Enterprise risk management (ERM)]]
* [[Definition:Task Force on Climate-related Financial Disclosures (TCFD)]]
* [[Definition:Responsible investment]]
{{Div col end}}

Definition:Principles for Sustainable Insurance (PSI) - Revision history

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