Korean insurance companies expand ESG management amid rising social interest

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South Korean insurance companies are actively engaged in various environmental, social, and governance (ESG) initiatives, including publishing biodiversity reports and developing innovative ESG insurance products, as social interest in ESG grows.

According to multiple sources in the insurance industry on Sunday, AXA Group has set the goal of reducing carbon emissions from its personal auto insurance portfolio by 20 percent and group investment portfolio by 50 percent by 2030 from 2019 levels.

The 2023 AXA Climate & Biodiversity Report published by AXA General Insurance Co. outlined the company’s environmental goals and management strategies, including its vision for biodiversity, and standards for ESG activities across the global organization.

Hanwha General Insurance Co. signed an agreement with E-Circular Governance, a non-profit public interest corporation approved by the Ministry of Environment, in May to build a virtuous cycle of resources by recycling used office equipment.

The company is also actively promoting ESG initiatives, such as a Zero Waste campaign that involves using “No Tree” environmentally friendly cups instead of paper cups in the office.

DB Insurance Co. developed the world’s first “environmental liability insurance” in collaboration with the Ministry of Environment in 2017, which covers third-party liability for environmental pollution.

This achievement was recognized as a best practice at a United Nations Environment Programme (UNEP) annual conference. Additionally, DB Insurance was the first in the insurance industry to provide training and equipment for North Korean defectors to help them resettle in South Korea and become self-reliant.

As consumer demand for insurers’ social responsibility and role in ESG expands, insurers are expected to show more interest in ESG management.

In particular, with the increasing number of catastrophic events caused by climate change, insurers are facing increasing losses due to insurance claims, making it a matter of survival.

An insurance industry insider emphasized the need for insurers to prepare more thorough ESG evaluation criteria, such as reflecting climate change risks in their future strategies.