The case for ESG investing and its adoption by P&C insurers

Sophisticated insurers are looking environmental, social and corporate government (ESG) investing as a way to actively engage with companies held in their investment portfolios. (Vintage Tone/Shutterstock)

Environmental, social and corporate government (ESG) investing has been getting a lot of airtime lately. Interest and engagement in ESG and its role in portfolio construction has increased among insurers, particularly P&C insurers.

Historically, ESG focus has been on the non-fixed-income/surplus side of the general account. This asset class was the first to generate ESG-based portfolio construction considerations. But more has since been done on the fixed income side, and this has expanded interest from insurers who invest the majority of their assets in fixed income.