Sustainability determines core business

Ensuring that insurance business is conducted in a responsible manner is the goal of the initiative "Principles for Sustainable Insurance" (PSI), in the development of which Munich Re plays a major role. The internationally binding principles are intended to fulfil a hitherto unmet need and to help insurance companies systematically consider ESG (environmental, social, governance) issues in conducting their core business. Five categories show how Munich Re is already combining insurance solutions with corporate responsibility.

Munich Re has been working since 2007 in the commission of the United Nations Environment Programme Finance Initiative (UNEP FI), which is developing the "Principles for Sustainable Insurance" (PSI), and has been actively involved in formulating these principles. The envisioned principles are to promote the responsible conduct of business along the entire insurance value chain. Munich Re assumed the chairmanship of the commission in September 2010. The final version of the principles is to be signed during a UN conference on sustainable development, "Rio+20", in June 2012.

The approach of the PSI corresponds to that of the "Principles for Responsible Investment" (PRI), which Munich Re was the first German company and first insurer to sign back in 2006. Together with the PRI, the PSI are to form the framework for a holistic approach to sustainability in the insurance industry.

“We cannot underestimate the influence of financial services and the potential impact of the world's most powerful private institutions on delivering a more intelligent management of the environment and its nature-based assets.”

Achim Steiner, Executive Director of the United Nations Environment Programme

Munich Re postulates that effecting its holistic approach to corporate responsibility will involve five activities:

• Enabling people to realise opportunities
  Munich Re develops innovative coverages for new, multifaceted risks to enable our clients to invest in a responsible manner. For instance, thanks to a hitherto unique policy developed by Munich Re, manufacturers of photovoltaic cells can give a 25-year performance warranty on their products.
  
  
• Facilitating the application of knowledge
  Modern integrated risk management requires detailed knowledge of, for example, the geographical environment. Our clients benefit from the expertise we have developed over many years and from our comprehensive risk knowledge. Munich Re’s NATHAN (Natural Hazards Assessment Network) Risk Suite optimises the assessment of natural hazard risks, from entire portfolios down to individual risks at specific locations anywhere in the world.
  
  
• Providing consultancy with a long-term perspective
  Our global expertise also enables us to give clients all-round advice that helps them to deal with global challenges. For instance, in Abu Dhabi, Munich Health and state-owned DAMAN National Health Insurance have set up a » public-private partnership which advises insureds on how to avoid developing diabetes, cardiovascular or other common diseases.
  
  
• Investing responsibly
  Private and institutional investors are able to invest their money just as sustainably as Munich Re and ERGO, for instance with Munich Re asset manager MEAG’s KlimaStrategie equities fund, which invests in companies whose business model aims to reduce greenhouse gas emissions and so to promote climate protection.
  
  
• Sharing knowledge
  Munich Re works with associations, NGOs, government representatives and scientists around the world to find solutions to global challenges. For instance, since 2008 Munich Re has partnered the London School of Economics and Political Science (LSE) in research aimed at quantifying the financial effects of climate change and creating a basis for making strategic decisions regarding the opportunities and risks facing the insurance industry.