Sustainable Insurance: Your path to responsible protection and a green future
7 May 2025
9
Minutes
Katrin Straub
CEO at nextsure
Are you looking for insurance cover that does more than just handle claims? A sustainable insurance policy invests your contributions responsibly and actively promotes a better future. Discover how to find the right policy and which criteria really matter.
The topic in brief and concise terms
Sustainable insurance considers Environmental, Social, and Governance (ESG) criteria in investments and business operations.
By choosing a sustainable policy, you can support environmental protection projects and invest in ethically acceptable areas.
Pay attention to transparency, specific sustainability goals of the insurer, and recognized labels to avoid greenwashing.
Understanding Sustainable Insurance: More Than Just a Trend
Sustainable insurance combines traditional risk protection with ethical investment criteria. They consider Environmental, Social, and Governance (ESG) factors. Over 60 percent of customers prefer policies with ecological or social value. This development shows a growing awareness of responsible consumption.
There is no single, universally accepted definition for sustainable insurance. However, many providers are guided by ESG criteria. These help assess investments based on sustainability aspects. For instance, your contributions do not flow into coal power or arms production.
Insurers play a triple role: as risk carriers, risk managers, and investors. With capital investments of around 1.8 trillion euros, German insurers have significant influence. The industry is committed to the UN Sustainable Development Goals (SDGs). This underscores the importance for a sustainable economy.
The demand for green policies is steadily increasing, especially among younger generations. This shift requires providers to offer transparent and credible options. Comprehensive advice helps identify the right sustainable insurance. The following section explains the specific benefits for you and the environment.
Secure benefits: Take advantage of green insurance solutions
Concluding sustainable insurance offers you tangible benefits. With your policy, you actively support environmental protection projects. For example, many insurers plant a tree for each new contract. This is a direct contribution to climate protection.
Your insurance premiums are invested in eco-friendly projects and companies. This often excludes investments in fossil fuels. Instead, capital is directed towards renewable energy or social housing projects. This means your money has a doubly positive impact.
Sustainable policies also often promote conscious behavior in everyday life. Some household insurance policies support the purchase of energy-saving devices with grants of up to 100 euros. Vehicle tariffs can include discounts for electric vehicles ranging from five to ten percent.
Some providers offer additional services for sustainable claims handling. This can mean covering additional costs for ecological building materials after water damage. As a result, your home is not only repaired but also made more environmentally friendly. Thus, consideration of sustainability criteria is becoming increasingly important.
Decoding ESG criteria: What to consider when making a selection?
ESG criteria are at the heart of sustainable insurance. "E" stands for Environment, "S" for Social, and "G" for Governance. Insurers use these to assess their investments and business practices. Pay attention to transparent reporting in these areas.
In the environmental sector (E), it's about more than just reducing CO2. Insurers, for example, invest in renewable energy and avoid companies that contribute to environmental destruction. GDV members aim to offset their Scope 1 and 2 emissions by 2025.
Social aspects (S) include fair working conditions and community involvement. This includes promoting diversity within their own company. Investments in social projects or fair trade also fall under this category. Transparency about these activities is a positive sign.
Good governance (G) means ethical behaviour and combating corruption. It also involves solid risk management for sustainability risks. BaFin published a bulletin on this topic as early as 2019. A detailed analysis of the providers is advisable here. EU regulations further tighten these requirements.
Regulatory Framework: What EU Taxonomy and Co. Mean
The EU is advancing sustainability in the financial sector with several regulations. The EU Taxonomy Regulation is a central component. It defines which economic activities are deemed environmentally sustainable. Six environmental objectives are significant here, including climate protection and adaptation to climate change.
Insurers must demonstrate that their products make a "significant contribution" to at least one environmental objective. At the same time, they must not significantly harm other objectives ("Do No Significant Harm" principle). Social minimum standards, such as human rights, must also be adhered to.
The Sustainable Finance Disclosure Regulation (SFDR) requires insurers to disclose ESG information. This concerns both the product level and the company itself. This allows customers to better assess the sustainability of financial products. Pay attention to these disclosures when making your choice.
Additionally, the Corporate Sustainability Reporting Directive (CSRD) demands more comprehensive sustainability reporting. In Germany, this is implemented through the CSR-RUG. BaFin monitors compliance and has defined sustainability as a supervisory priority. These regulations significantly increase transparency for consumers. The next step is selecting suitable products.
Finding green policies: Practical tips for your sustainable insurance
Finding the right sustainable insurance requires some research. Start by analysing your personal sustainability goals. Which aspects are particularly important to you? Is it primarily about climate protection, or does social justice also play a role?
Review the sustainability reports of the insurers. Many companies publish details about their ESG strategies and investments. Look for specific goals and their implementation. Some insurers are certified by independent institutes. The "ECOreporter Seal" is an example of such an award.
Look for the following features in sustainable products:
Investments: Are exclusions (e.g., coal, arms) and positive criteria (e.g., renewable energies) clearly stated? At least 75 percent of investments should be sustainable.
Claims settlement: Are there additional benefits for sustainable repairs or replacements? Up to 20 percent additional benefit is possible here.
Contribution transparency: Is it disclosed how and where your contributions are invested?
Additional services: Are social or ecological projects directly supported, e.g., tree planting campaigns per policy?
Comparison portals can provide an initial orientation, but not all deeply consider sustainability aspects. Individual advice from experts like nextsure can help separate the wheat from the chaff. This ensures that your insurance truly aligns with your values. The range of products continues to grow steadily.
Focus on product variety: From sustainable liability insurance to retirement provision
Sustainable options are now available in almost every area of insurance. In car insurance, some policies promote electric mobility with premium discounts of up to ten percent. Repairs using second-hand parts or in certified workshops are also supported.
In the area of home and living, sustainable building and household insurance often offer additional benefits. This can include covering the costs of energy-efficient appliances up to 250 euros or using ecological insulation materials in repairs. Photovoltaic insurance is inherently a contribution to the energy transition.
Private liability insurances also come with a green focus. These can, for example, support waste reduction projects with one euro per policy. Pet owner's liability insurance can offer similar models for animal protection projects. Every policy can make a small difference.
In retirement and disability insurance, sustainable investments are crucial. Here, you should carefully examine the exclusion criteria and which sectors are being invested in. Fund-linked products often offer a selection of sustainable ETFs or funds. A sustainable retirement plan secures your future and the planet's. The selection requires diligence.
Expert Tip: Avoid pitfalls and recognize true sustainability
Not every product advertised as "green" delivers what it promises. Look for clear, verifiable criteria and transparency. Vague statements like "we invest in environmentally friendly ways" are not sufficient. Ask for specific investment principles and exclusion lists. At least 90 percent of investments should meet the criteria.
Our expert tip: Check if the insurer is a member of initiatives like the Principles for Sustainable Insurance (PSI) or the Net-Zero Asset Owner Alliance (NZAOA). This demonstrates a serious commitment. However, membership alone is not a guarantee; implementation matters.
Some seals can offer guidance. The "Native Rating" evaluates property insurance based on more than 300 indicators. The Greensurance Foundation awards this seal. The ECOreporter seal also reviews insurers for sustainability. Be critical, however, as there are many different labels.
BaFin requires insurers to consider sustainability risks in risk management. This is an important step, but the depth of implementation varies. A thorough examination of the company's philosophy and concrete measures is essential. This ensures that your sustainable insurance makes a real contribution. The next section summarizes the key points.
Shaping the Future: Your Contribution through a Sustainable Insurance
More useful links
Der Gesamtverband der Deutschen Versicherungswirtschaft (GDV) provides comprehensive information on sustainability in the insurance industry.
Der Gesamtverband der Deutschen Versicherungswirtschaft (GDV) offers its Sustainability Report 2023, which gives detailed insights into the sustainability activities and goals of the industry.
The Federal Environment Agency provides information on the sustainable financial system and its importance for environmental protection and economic transformation.
The Federal Statistical Office provides official data and indicators on sustainability in Germany, reflecting social and environmental developments.
The Federal Ministry of Finance publishes the German Sustainable Finance Strategy, which sets the framework for sustainable financing in Germany.
The Deutsche Bundesbank explains its role and activities in the area of Sustainable Finance, particularly in the context of banking supervision.
PwC Strategy& offers an analysis of the relevance of ESG factors in the insurance industry and their impact on business models.
FAQ
What are ESG criteria in insurance?
ESG stands for Environment, Social, and Governance. Insurers applying ESG criteria, for example, invest in environmental protection, ensure fair working conditions, and act transparently and ethically.
Does every sustainable insurance invest in the same way?
No, investment strategies can vary. Some insurers rely on strict exclusion criteria (e.g., no investments in fossil fuels or armaments), while others opt for "best-in-class" approaches or thematic investments (e.g., renewable energies).
Are sustainable insurance policies more expensive?
Not necessarily. Premiums depend on many factors. Sometimes, sustainable measures can even lead to savings in the event of a claim, or there may be discounts for environmentally friendly behaviour. A thorough comparison is always worthwhile.
What role does the EU taxonomy play in sustainable insurance?
The EU taxonomy is a classification system that defines which economic activities are considered environmentally sustainable. Insurers must disclose the extent to which their products and investments meet these criteria, which increases transparency.
Can I adapt my existing contracts for sustainability?
That depends on the provider and the contract. Sometimes it is possible to switch to a sustainable tariff, while in other cases it may be more sensible to enter into a new agreement. Talk to your advisor about it or let us at nextsure advise you.
How does nextsure assist in choosing a sustainable insurance?
At nextsure, we analyse your individual situation and sustainability goals. We help you find transparent and credible offers that align with your values and provide comprehensive protection. Request your personalised risk analysis now.
