More than half of insurance supervisors and regulators (58%) that responded to a United Nations Development Programme (UNDP) survey said they have incorporated climate-related risks into their regulatory capital framework, with a further 30% of them planning to do so in the future. However, 84% of respondents have not yet included climate-related transition risks as part of this, although the UNDP noted that this is on the table for some. Respondents took different views about what constituted inclusion of climate-related risks, with some saying that they could only be accounted for if they contained evidence-backed calibration and others taking a less stringent approach. Respondents highlighted a several challenges that they faced when accounting for climate-related risks in their capital frameworks, ranging from the lack of historical data on climate-related risks to the limited availability of high quality and granular sustainability-related data. They also cited difficulties in quantifying financial losses, including attributing defaults to climate risk. The UNDP received responses from 31 Sustainable Insurance Forum members, representing 82% of its membership.
