Insurance in a Sustainable Future: Green Insurance Approaches and the Integration of Esg Criteria
Synopsis
This chapter provides a comprehensive analysis of the qualitative and structural transformation within the insurance sector in line with global sustainable development goals, focusing on green insurance approaches and the integration of ESG (Environmental, Social, and Governance) criteria. The study demonstrates how insurance institutions are departing from their traditional, passive indemnifying roles to become proactive risk managers and major institutional investors, thereby playing a pivotal strategic role in addressing climate crises and safeguarding financial stability. The green transition in insurance necessitates shifting from historical static risk models toward dynamic climate risk paradigms grounded in climate science and predictive modelling. In this context, the insurance sector acts as a powerful leverage mechanism to redirect global capital into a low-carbon economy by imposing underwriting restrictions on carbon-intensive and high-emitting industries. Furthermore, insurers actively promote eco-friendly technologies—such as green buildings, electric vehicles, and renewable energy projects—through tailored underwriting policies, premium incentives, and the allocation of institutional portfolios into sustainable financial instruments like green bonds. On an international level, the study evaluates the transformative impact of global frameworks, including the UN PSI (Principles for Sustainable Insurance), PRI (Principles for Responsible Investment), FIT (Forum for Insurance Transition to Net Zero), and the EU Taxonomy. In the context of Türkiye, it examines the alignment of the domestic financial architecture following accession to the Paris Agreement, alongside regulations issued by the BRSA and the adoption of TSRS (Turkish Sustainability Reporting Standards). Finally, the chapter addresses structural challenges such as data transparency gaps and greenwashing risks, proposing strategic recommendations centred on dynamic risk analysis, national taxonomy alignment, and capacity building.
References
Akomolehin, O. F., & Oluwaremi, J. B. (2025). The impact of green insurance schemes on financial sustainability of renewable energy projects. World Journal of Advanced Research and Reviews 26(2), 4370–4386. doi: 10.30574/wjarr.2025.26.2.1997.
Armstrong, A. (2020). Ethics and ESG. Australasian Accounting, Business and Finance Journal 14(3), 6–17. doi: 10.14453/aabfj.v14i3.2.
Aslani, H. (2022a). Innovating Underwriting with ESG Risk and Pricing Models. Capgemini SE. Retrieved June 20, 2026 (https://www.capgemini.com/insights/research-library/?search=sustainable-underwriting-how-insurers-can-account-for-esg-risks-and-enable-dynamic-pricing%2F).
Aslani, H. (2022b). Sustainable underwriting: how ınsurers can account for esg risks and enable dynamic pricing. Capgemini SE. Retrieved June 20, 2026 (https://www.capgemini.com/us-en/insights/research-library/sustainable-underwriting-how-insurers-can-account-for-esg-risks-and-enable-dynamic-pricing/).
Ay, H. M., Söylemez, A., & Güneş Ay, N. (2023). The ımportance of green bonds in financing the sustainable environment. Paradigma: İktisadi ve İdari Araştırmalar Dergisi 12(2), 72–79.
Battiston, S., Mandel, A., Monasterolo, I., et al. (2017). A climate stress-test of the financial system. Nature Climate Change, 7(4), 283–288.
Bayazıt Hayta, A., & Gürbüzer, G. B. (2020). “Sürdürülebilir Kalkınma Ile Sürdürülebilir Sigortacılık Ilişkisi.” Finans Ekonomi ve Sosyal Araştırmalar Dergisi 5(4):609–19. doi: 10.29106/fesa.771026.
Boffo, R, & Robert P. (2020). Esg investing: Practices, progress and challenges. OECD Paris.
Bosshard, P. (2022). Coal exit policies add billions of dollars to ınsurers’ shareholder value, analyst report suggests. Insure Our Future Global. Retrieved April 15, 2026 (https://global.insure-our-future.com/coal-exit-policies-add-billions-of-dollars-to-insurers-shareholder-value-analyst-report-suggests/).
Bressan, S. (2023). Effects from ESG Scores on P& C Insurance Companies. Sustainability 15(16), 1–15. doi: 10.3390/su151612644.
Canikli, S. (2022). Sürdürülebilir finans mekanizmaları, araçları ve sürdürülebilir kalkınma ilişkisi. Akdeniz Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 22(21), 26-39. doi: 10.25294/auiibfd.903364.
Chiaramonte, L., Dreassi, A., Paltrinieri, A., et al. (2020). sustainability practices and stability in the insurance industry. Sustainability 12(14), 5530. doi: 10.3390/su12145530.
Corpus Sigorta. (2024). Sürdürülebilirliğin önemli adımı yeşil sigortacılık. Retrieved June 11, 2026 (https://corpussigorta.com.tr/blog/sigorta/surdurulebilirligin-onemli-adimi-yesil-sigortacilik-330).
Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review 54(1), 64-87.
Di Tommaso, C. & Mazzuca, M. (2023). The stock price of European insurance companies: What is the role of ESG factors? Finance Research Letters, 56, 1-7. doi:10.1016/j.frl.2023.104071
Ehlers, T., & Packer, F. (2017). Green bond finance and certification. BIS Quarterly Review, 89–103.
Eling, M. (2024). Is the insurance industry sustainable? The Journal of Risk Finance 25(4), 684-703. doi: 10.1108/JRF-12-2023-0314.
Galbreath, J. (2013). ESG in Focus: The Australian evidence. Journal of Business Ethics, 118(3), 529-541. doi: 10.1007/s10551-012-1607-9.
Gatzert, N., Reichel, P., & Zitzmann, A. (2020). Sustainability risks & opportunities in the insurance industry. Zeitschrift Für Die Gesamte Versicherungswissenschaft 109(5), 311–331. doi: 10.1007/s12297-020-00482-w.
Gianfrate, G., & Peri, M. (2019). The green advantage: Exploring the convenience of issuing green bonds. Journal of Cleaner Production 219, 127-135. doi: 10.1016/j.jclepro.2019.02.022.
Glomsrød, S., & Wei, T. (2016). The effects of energy efficiency improvement in China with global interaction. AIMS Energy 4(1), 37- 51. doi: 10.3934/energy.2016.1.37.
Golnaraghi, M. (2018). Climate change and the insurance industry: Taking action as risk managers and investors. The Geneva Association, 1-48.
Gond, J.-P., & Piani, V. (2012). Enabling institutional investors’ collective action. Business & Society 52(1), 64-104. doi: 10.1177/0007650312460012.
Gül Yiğit, M., & Karabulut, R. (2024). sürdürülebilirlik kapsamında sigorta şirketlerinin incelenmesi. MTÜ Sosyal ve Beşeri Bilimler Dergisi, 4(2), 113–121.
Gunti, P. (2021). ESG-Kriterien Bei Investitionen Als Richtschnur. HZ Insurance.
Hu, Y., Du, S., Wang, Y., et al. (2023). How does green insurance affect green innovation? Evidence from China. Sustainability, 15(16), 1-15. doi: 10.3390/su151612194.
International Finance Corporation, & Amundi Asset Management. (2026). Emerging market sustainable bonds: IFC–amundi joint report. Washington, Paris.
İklim İçin 350 Derneği & SEFİA. (2025). Türkiye’deki bankaların iklim değişikliğine yaklaşımı 2025. Retrieved April 25, 2026 (https://sefia.org/wp-content/uploads/2025/11/turkiyedeki-bankalarin-iklim-degisikligine-yaklasimi-2025-v2.pdf).
KGK. (2026). Yayımlanan raporlar. Retrieved April 15, 2026 (https://www.kgk.gov.tr/surdurulebilirlik-yayimlananraporlar).
Khan, M., Serafeim, G., & Yoon, A. (2015). Corporate sustainability: First evidence on materiality. New York.
Kousky, C. (2019). The role of natural disaster insurance in recovery and risk reduction. Annual Review of Resource Economics 11(1), 399-418. doi: 10.1146/annurev-resource-100518-094028.
Krueger, P., Sautner, Z., & Starks, L. T. (2020). The importance of climate risks for institutional investors. edited by A. Karolyi. The Review of Financial Studies, 33(3), 1067-1111. doi: 10.1093/rfs/hhz137.
Li, T.-T., Wang, K., Sueyoshi, T., et al. (2021). ESG: research progress and future prospects. Sustainability, 13(21), 1-28. doi: 10.3390/su132111663.
Marti, A., Bastida-Vialcanet, R., & Marimon, F. (2024). A systematic literature review: ESG criteria implementation in the insurance industry. Intangible Capital, 20(1), 193. doi: 10.3926/ic.2426.
Mills, E. (2005). Insurance in a climate of change. Science, 309(5737), 1040-1044. doi: 10.1126/science.1112121.
Moffitt, J. S., Patin, J.-C., & Watson, L. (2023). Corporate environmental, social, and governance (ESG) performance and the internal control environment. Accounting Horizons, Forthcoming 1-49.
Kılıç, B.N. (2022). Bankacılıkta sürdürülebilirlik. Retrieved July 16, 2026 (https://blog.lexpera.com.tr/bankacilikta-surdurulebilirlik/).
Nogueira, F. G., Lucena, A. F. P., & Nogueira, R. (2018). Sustainable insurance assessment: towards an integrative model. The Geneva Papers on Risk and Insurance - Issues and Practice, 43(2), 275-299. doi: 10.1057/s41288-017-0062-3.
PRI. (2026). About the PRI. Retrieved July 15, 2026 (https://www.unpri.org/about-PRI).
Rau, P. R., & Yu, T. (2024). A survey on ESG: investors, institutions and firms. China Finance Review International, 14(1), 3–33.
Scholer, M., & Barbera, L. C. (2020). The EU sustainable finance taxonomy from the perspective of the insurance and reinsurance sector (No 17). EIOPA, Risks and Financial Stability Department.
Şeker, Y., & Şengür, E. D. (2021). The impact of environmental, social, and governance (ESG) performance on financial reporting quality: International evidence. Ekonomika, 100(2), 190-212. doi: 10.15388/Ekon.2021.100.2.9.
Shen, E. (2023). ESG in reinsurance underwriting. PeakRe. Retrieved May 17, 2026 (https://www.peak-re.com/en/knowledge-hub-insights/esg-in-reinsurance-underwriting/).
Şimşek, O., & Tunalı, H. (2022). Yeşil finansman uygulamalarının sürdürülebilir kalkınma üzerindeki rolü: Türkiye projeksiyonu. Ekonomi ve Finansal Araştırmalar Dergisi, 4(1), 16-45.
Sood, K., & Özen, E. (2024). A systematic review of ESG in the insurance industry: Navigating the path to sustainability. International Journal of Sustainable Development and Planning, 19(3), 807–821. doi: 10.18280/ijsdp.190301.
Thistlethwaite, J., & Wood, M. O. (2018). Insurance and climate change risk management: rescaling to look beyond the horizon. British Journal of Management, 29(2), 279–298. doi: 10.1111/1467-8551.12302.
Türkiye Sigorta Birliği. (2024). Sigorta sektöründe sürdürülebilirlik kılavuzu. Türkiye sigorta birliği. Retrieved July 2, 2026 (https://tsb.org.tr/content/PageAssets/TSB_SigortaSektorundeSurdurulebilirlikKilavuzu.pdf ).
UNEP FI. (2020). PSI ESG Guide for non-life insurance: Managing environmental, social and governance risks in non-life insurance business (Version 1.0).
UNEP FI. (2026a). Forum for insurance transition. United Nations Environment Programme Finance Initiative. Retrieved July 1, 2026 (https://www.unepfi.org/forum-for-insurance-transition-to-net-zero/).
UNEP FI. (2026b). Insurance. United Nations Environment Programme – Finance Initiative. Retrieved July 18, 2026 (https://www.unepfi.org/insurance/).
UNEP Finance Initiative & PSI Working Group for Nature. (2025). PSI Working Group for Nature Workplan 2025–2026. Geneva.
Weber, O. (2010). Sustainability and environmental risk management in canadian banks and Financial Service Institutions.
Whelan, E., Atz, U., Van Holt, T., et al. (2021). ESG and financial performance: uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015 – 2020. New York.
Widjaja, G. (2024). Environmental, social, and governance (esg) factors in financial management: a systematic review and research agenda. International Journal of Financial Economics, 1(2), 447-458.
World Commission on Environment and Development. (1987). Our common future. Oxford, UK.
Yılmazcan, O. (2025). Yeşil finans: Geleceğe yatırım. TESAM Akademi Dergisi, 12(2), 699-740. doi: 10.30626/tesamakademi.1665471.
