Sustainable underwriting

Sustainable underwriting refers to the explicit integration of environmental, social and governance criteria into the selection, pricing and exclusion of risks. It goes beyond physical risk management to incorporate the insured's climate trajectory, transition credibility and reputational exposure. In practice, a sustainable underwriter may decline cover for a coal project, apply a surcharge to a transition-exposed asset, or condition acceptance on a decarbonization plan. The practice is framed by the UNEP Principles for Sustainable Insurance and by the net zero commitments of major insurers. It raises a tension between the insurer's traditional role, pooling risk without judging it, and an emerging role of steering capital flows toward a low-carbon economy. Antitrust authorities have questioned the legality of certain coordinated exclusion coalitions.