The UN Environment Programme's insurance leader talks to Joshua Geer about the sector's participation at the nature and climate COPs, the development of FIT and plans for 2025
Since October, it has been a whirlwind of events for Butch Bacani, head of insurance at the UN Environmental Programme Finance Initiative (UNEP FI).
After the biodiversity COP16 in Colombia, the climate COP29 in Azerbaijan and the European leg of the global insurance summit in Dublin, InsuranceERM sat down with him at the UNEP FI global roundtable in Geneva this month, where he shared insights on insurers' evolving role in global climate efforts, the progress of the Forum for Insuring the Transition to Net Zero (FIT), and how the industry is preparing for the future amid emerging global risks.
Insurers at COP
Bacani said insurers have emerged as key participants at COP events, shifting from being seen as financial backers to becoming essential partners in managing climate-related risks.
"There has been an increasing presence by the insurance industry – not only as institutional investors but also as risk managers and risk carriers. We are seeing that progress over time," he said.
At the nature-focused COP16 in Cali, Colombia, insurers played a role in shaping the nature and biodiversity agenda, he said. Here also, UNEP FI presented its global guide on priority actions for nature, setting direction for insurers to align their strategies with biodiversity protection.
Discussions also explored how insurers could scale up climate risk insurance solutions for micro, small, and medium-sized enterprises, a critical segment in building economic resilience, Bacani said.
At COP29 in Baku, UNEP FI launched the first global guide on transition plans for insurers.
"The guide addresses a range of sustainability issues, focusing on net zero, resilience and a just transition... while also wiring in nature and pollution," Bacani explained. He noted this comprehensive approach reflects the increasing materiality of climate, biodiversity and pollution agendas and insurers' expanding responsibilities in addressing sustainability risks and opportunities.
"There's a strong agenda to accelerate sustainable insurance practices and solutions en route to COP30 in Brazil"
COP29 also provided a platform for highlighting the specific challenges faced by the Global South, where climate change impacts are often most severe. Bacani said there is the growing urgency for insurers to play a more active role, stressing the need for "better risk analytics, loss prevention, and risk reduction efforts, greater adaptation investment in climate-resilient infrastructure and innovative insurance solutions".
An important milestone at COP29 came from Brazil's insurance association, CNseg, which became a supporter of the FIT. Bacani added the president of CNseg announced he would create a 'house of insurance' at COP30, referring to next year's climate summit in Belém, Brazil.
"It was very fitting, as the Principles for Sustainable Insurance were born in Brazil during the 2012 UN conference on sustainable development."
Looking ahead to COP30, Bacani envisions an even more prominent role for insurers, with a dedicated insurance area on-site to showcase innovations and sustainability solutions.
"We are already gearing up," he said. "There's a strong agenda to accelerate sustainable insurance practices and solutions en route to COP30 in Brazil."
Dublin insurance summit
The European leg of the global insurance summit in Dublin built on April's inaugural event in Los Angeles, convened by California's insurance commissioner.
Organised by the Central Bank of Ireland, the UN Development Programme and UNEP, the summit focused on advancing sustainability strategies in the insurance sector.
Transition plans topped the agenda. "We covered how to ensure these plans are developed in a credible, ambitious and action-oriented way," Bacani said.
"New technologies also require better understanding by insurers before they can be priced and insured"
With the evolving regulatory landscape, including Europe's Corporate Sustainability Reporting Directive (CSRD), transition plan disclosure is becoming mandatory for firms in many jurisdictions. This shift has pushed insurers to focus on not only committing to net zero but also providing clear roadmaps on how they intend to achieve it.
The summit also explored how insurers can "de-risk" climate solutions such as renewable energy and emerging technologies like long-duration energy storage, so they can attract financing and investment. "But new technologies also require better understanding by insurers before they can be priced and insured," Bacani explained.
Discussions on claims management revealed an opportunity for insurers to integrate sustainability principles. Bacani described how some insurers are adopting circular economy practices, such as repairing instead of replacing damaged goods and building back greener after disasters.
"It's a largely untapped opportunity," he said. "We're starting to see insurers dissect the entire claims process and understand which parts have the highest emissions profile."
The summit also spotlighted climate resilience efforts, from wildfire risk management in California to flood prevention in Italy. Bacani stressed: "Reducing underlying climate risk helps improve the availability and affordability of insurance."
The FIT
Launched in April, the FIT is a global multistakeholder platform aimed at accelerating the insurance industry's role in supporting a just transition to a resilient net-zero economy.
Its first major output was the guide on transition plans for insurers, and Bacani explained why this became FIT's top priority: "If you are a company with a net-zero pledge, for example, you need to show how you will achieve that goal. We felt we needed to close the gap on transition plan guidance specifically for insurers."
"We want to feature emerging practices related to transition and upskill everyone in the insurance ecosystem"
The guide lays the groundwork for more detailed guidance to be developed in aspects such as transitioning underwriting portfolios, claims emissions and the role of brokers – all still largely unexplored areas. Bacani sees 2025 as a pivotal year.
"We expect to build on this solid foundation," he said. "Our next outputs will move the needle further, especially given the evolving policy and regulatory landscape."
He also explained the FIT has a knowledge hub, which enables insurers, regulators, academics and civil society to better understand the evolving risk landscape. "We want to feature emerging practices related to transition and upskill everyone in the insurance ecosystem," Bacani said.
Managing climate amid emerging risks
The insurance industry faces mounting challenges as climate risks intersect with geopolitical instability, macroeconomic pressures and the rise of artificial intelligence (AI).
But Bacani believes insurers are well-positioned to balance sustainability with these emerging risks.
He stressed that sustainability cannot be viewed in isolation. "Macroeconomic pressures will be exacerbated by more extreme weather and further degradation of nature and biodiversity," Bacani said. "Addressing climate, nature and pollution is, for example, part of the solution to energy security and food security."
"Macroeconomic pressures will be exacerbated by more extreme weather"
Climate-related disasters already strain national economies, compounding debt crises in vulnerable countries.
"Every time there's a climate shock such as the floods in Pakistan or Typhoon Haiyan in the Philippines, these countries have to rebuild bridges, infrastructure, and schools," Bacani said. "They also need to borrow more money, which perpetuates the debt crisis."
Bacani also sees AI as a potential tool to advance sustainability practices. He suggested the industry should look at how AI could help insurers better assess climate risks, streamline claims processes and enable faster payouts after climate-related disasters.
Ahead of COP30 in Brazil next year, expectations for the insurance sector will only grow higher and it is an opportunity to step up, not just in supporting a net zero transition but actively shaping solutions and ensuring resilience and a just transition.
For Bacani, the path forward is clear: "There is a strong agenda to amplify sustainable insurance practices – and we are ready to meet the challenge. Time is non-renewable."
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