The world is rapidly changing. Climate disasters are more prevalent and insured losses from natural catastrophes are increasing. For the insurance industry, the loss and damage to property and life is significant and has resulted in huge pay-outs, in turn threatening the survival of many businesses.

The financial implications of these scenarios have forced many insurers to re-evaluate their approach to underwriting. But addressing the cause — the increased carbon in the atmosphere — can help to prevent climate disasters, reduce the subsequent damage to property and safeguard businesses.

In this report, KPMG professionals highlight key considerations for insurance organisations on their journey to net zero. We discuss the importance of baselining emissions and share industry insights and frameworks to help with the progression of transition plans. 

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ESG in insurance: Insured emissions

Discover how insurers are baselining emissions and tracking progress on their journey to net zero.



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Why baselining emissions is strategically important for insurers

In order to drive net-zero commitments and to address the risks associated with climate change, insurers should first understand their own emissions and set realistic reduction plans. By capturing baseline data, insurance leaders will have better visibility on their progress against the targets set out.

59 percent of global insurance CEOs believe that their organisation is seeing increased demand from stakeholders for greater reporting and transparency on ESG issues.

A robust approach and platform to baseline emissions can provide a foundation for insurers to start their transition towards net zero. A net-zero transition plan is integral to an insurer’s overarching business and climate strategy and can help to inform a comprehensive strategic roadmap that articulates how the company will achieve net zero. 

A robust net-zero transition plan should consider these 10 key elements:

  • Set the emissions baseline to create the net-zero pathway which include interim targets.

  • Create a short-to-medium term prioritised action plan to achieve interim targets, focusing on emissions hotspots across business operations and product lines. The plan should be costed to understand size of opportunities and identify financing options

  • Focus on how organisational change, systems, data and business processes should pivot to leverage opportunities in the transition.

  • Include a data plan that builds on emissions baselining and can collate and update data to feed into management information and support decision-making.

  • Develop governance mechanisms that support execution of the plan, underpinned by robust periodic reporting and accountability is included in remuneration plans.

  • Put in measures to address risks for the workforce, supply chain, communities or customers that could arise in the transition.

  • Develop an engagement strategy to work with customers, peers and government to collaborate and identify opportunities to reduce emissions across the value chain.

  • Develop measures to demonstrate resilience to the changing climate and how that resilience is being built and embedded into the organisation.

  • Understand how the business may need to evolve to deliver on the transition. Ensure the workforce have the right expertise and businesses processes to adapt to the changing operating model.

  • Design a communication plan, including key message materials, with a strategy in place to manage all stakeholders from shareholders, regulators, employees and NGOs.



Every journey starts with a first step. For insurance organisations looking towards their transition to net zero, baselining emissions should be that first initiative. Once established and integrated into the wider financial and operational functions, this provides a starting block to measure where insurers are on their decarbonisation journey, and how far they still need to go to meet their organisation’s commitments. 

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