Business Quest 
As world leaders met in Baku, Azerbaijan for COP 29, insurance industry leaders sent their best negotiators to convince Africa governments to develop blueprints that require public and private sector entities to embrace insurance as a major driver to the adoption of Environmental, Social and Governance (ESG) guidelines.
The annual event that brings together industry experts, policymakers, and thought leaders to discuss climate finance is a forum for developing countries to seek funds to help combat global warming and climate crisis by championing local Greenhouse Gas (GHG) emissions reduction policies and practices.
As insurance sector players, we have a duty to implement practical measures that affirm our contribution to reducing GHG emissions at an operational level.
These efforts should be well-documented and, as a best practice, shared transparently with stakeholders through periodic sustainability reports, reflecting our progress and accountability.
We are also to take an active interest in our customers’ operations to affirm the presence of sustainability practices and policies. To promote this agenda, insurance companies have signed several commitments to promote sustainable practices.
This standpoint is further supported by the UN Environment Programme on Finance Initiatives, which asserts that there is a serious need for insurance companies to identify market gaps and develop lasting solutions that solve not only customer problems but also provide services at an affordable price, strengthening the industry’s contribution to resilient, inclusive, and sustainable communities and economies.
Insurance companies must engage in continuous innovation to remain relevant beyond their business including activities in the insurance value chain— stakeholder interactions and engagements in developing, implementing and enhancing sustainability goals.
Additionally, insurance companies must provide environmentally conscious solutions to their customers.
Since COP 15, the insurance sector has seen a significant shift towards sustainability. with boards approving policies and investments aimed at reducing energy and water consumption within institutional operations.
These measures have been complemented by initiatives to enhance natural ventilation and daylight utilization in office spaces, fostering environmentally conscious practices across the industry.
Changes made also include proactive activities among insurance employees in participating in greening programmes, promoting wellness programmes as well as taking deliberate steps to improve employee welfare.
This is a challenge that CIC Group recently took while launching its inaugural sustainability report.
The insurer is actively implementing a six-year sustainability strategy guided by four strategic pillars: Environmental Stewardship, Social Responsibility, Economic Resilience, and Responsible Governance. We aim to increase the percentage of revenue spent on Social Investment for greater impact, reduce our scope 1 and 2 GHG emissions by 30%, increase microinsurance policies at CIC Group to 25 percent achieve gender balance across the workforce by 2030 among other commitments.
As individuals make their commitments to sustainable insurance, the Baku discussions highlighted the critical role of insurance in managing climate-related risks and supporting resilience, giving more foothold on the role of insurance in supporting development. Agreements made during the COP meetings emphasized that insurers should prioritise innovative solutions such as parametric insurance and microinsurance products, to protect against extreme weather events.
Insurance companies were also encouraged to collaborate with governments and other stakeholders to integrate climate resilience into their frameworks, ensuring sustainable operations while supporting adaptation efforts. By aligning products with climate goals and addressing coverage gaps, insurers can enhance economic stability and contribute to broader climate finance objectives.
Practical actions taken by individual companies must, therefore, live up to the four Ps of sustainability (people, planet, profit and purpose). The insurance industry players need to take the lead in developing roadmaps to enhance sustainability practices across their businesses.
There is a need to enhance transparency and governance as part of their sustainability strategies by implementing robust disclosure practices, ensuring accountability, and fostering an ethical culture that prioritises stakeholder engagement and sustainable decision-making. They also need to commit to transparency, accountability, and advocate for compliance with social and environmental laws.
In addition, while insurers pursue innovation and development of new products to remain afloat, they must create internal processes that promote upskilling their staff to remain competitive in the industry.
Companies must also commit to these practices by enhancing transparency in leadership as they highlight the efforts on sustainability practices.
Companies engaging in sustainable insurance must ensure that their products align with sustainability principles, are fit for purpose, and adapt to evolving market needs. Achieving this requires ongoing policy engagement and collaboration between the private and public sectors to create and build a sustainable insurance business in Kenya and across the globe.
The writer is the Head of Strategy and Investor Relations at CIC Group
