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Audit-Ready Carbon Reporting for Insurers

Track financed emissions from investment portfolios using PCAF. Monitor underwriting exposure to high-carbon sectors and physical climate risk in P&C portfolios.

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The Industry Hotspot: Investment Portfolio Financed Emissions

90-95% from investments

For insurers, 90-95% of carbon footprint is financed emissions from investment portfolios (Scope 3 Category 15). A $50B investment portfolio (typical for mid-size P&C insurer) generates ~2.5 million tCO2e annually if invested in market-weighted equities/bonds. Coal investments have 10x higher carbon intensity than tech stocks. NetNada calculates PCAF-compliant financed emissions across asset classes, tracks underwriting exposure to fossil fuels, and measures physical risk from climate-related claims.

SASB Industry Definition

The Insurance industry includes property and casualty (P&C) insurers, life and health insurers, reinsurers, and insurance brokers. Entities collect premiums from policyholders and invest these funds (float) in diversified portfolios of equity, bonds, and real estate. The industry faces climate-related risks on both sides of the balance sheet: investment portfolios exposed to transition risk, and underwriting portfolios exposed to physical climate risks (hurricanes, floods, wildfires).

View SASB Standard →

Industry-Specific Carbon Accounting

No generic solutions. Metrics, data sources, and reporting aligned to Insurance operations.

Investment Portfolio Financed Emissions (PCAF)

Import holdings data from investment managers. Apply PCAF methodology: Listed equity via EVIC attribution, corporate bonds via outstanding debt, sovereign bonds via GDP, real estate via property energy. Calculate tCO2e per $M AUM and compare vs insurance industry benchmark (50 tCO2e/$M for global insurers).

PCAF-compliant portfolio emissions

Underwriting Exposure to Fossil Fuels

Extract underwriting data by policyholder industry (NAICS/SIC codes). Identify premiums written for coal companies, oil & gas E&P, refineries. Calculate: % of premiums from fossil fuel sector. Benchmark vs peer insurers (global average: 3-5% of P&C premiums).

Fossil fuel underwriting tracked

Climate-Related Claims Tracking

Tag P&C claims by cause: Hurricane (Cat 4+), wildfire, flood, drought. Compare YoY growth vs historical averages. Example: If wildfire claims increased 40% over 5-year average, quantify climate-driven loss ratio impact. Support TCFD physical risk disclosure.

Climate claims attribution

Coal Investment Divestment Monitoring

If insurer committed to divest from thermal coal: Track holdings in coal mining and coal power companies (via GICS or RMI classification). Generate monthly reports: $ invested in coal, % of AUM, YoY reduction. Target example: 100% coal divestment by 2030.

Coal divestment progress

Net-Zero Insurance Alliance (NZIA) Reporting

For NZIA members: Report % of underwriting portfolio in net-zero aligned sectors. Disclose interim 2030 targets for high-emitting sectors (power generation, automotive, commercial real estate). Track engagement with policyholders on transition plans.

NZIA commitment tracking

Green Bond and Climate Solutions Investing

Track % of investment portfolio allocated to green bonds, renewable energy project bonds, sustainability-linked bonds. Calculate: Climate solutions AUM ÷ Total AUM. Industry leaders: 5-10% of portfolio in climate solutions.

Climate solutions allocation

Product Features for Insurance

Use Carbon Data Uploader to import investment portfolio holdings data and underwriting policy lists for automated financed emissions and climate exposure analysis. Learn more →

The Activity Calculator applies PCAF methodology across insurance investment portfolios—equities, bonds, real estate—ensuring accurate financed emissions attribution. Learn more →

Related Solutions

See our Carbon Accounting solution for end-to-end financed emissions tracking and climate risk disclosure for insurance companies.

View solution

Insurance Case Studies

How entities in this industry use NetNada to solve carbon accounting challenges.

Regional P&C Insurer (A$12B investment portfolio, A$3B annual premiums)

Challenge

AASB S2 required financed emissions disclosure from investment portfolio. Board committed to NZIA but lacked baseline emissions data. Investment managers provided holdings but not emissions attribution.

Solution

Deployed NetNada with quarterly portfolio imports. Matched holdings to emissions databases (CDP, Bloomberg). Applied PCAF methodology: 65% listed equity (PCAF Score 2), 30% corporate bonds (Score 3), 5% sovereign debt (Score 3).

Result

Established baseline: 600,000 tCO2e financed emissions (50 tCO2e per $M AUM, aligned with global average). Set 2030 target: 25 tCO2e per $M AUM (50% reduction). Identified coal holdings (0.8% of portfolio, 12% of financed emissions) for priority divestment.

Multi-Line Insurer (Life, P&C, Health - $80B AUM)

Challenge

ClimateFirst initiative required reporting: (1) Investment financed emissions, (2) Underwriting exposure to fossil fuels, (3) Climate-related claims trends. Data siloed across three business units.

Solution

Used NetNada to consolidate: Investment data from asset managers → PCAF calculations. Underwriting data from policy admin system → fossil fuel exposure by NAICS code. Claims data → climate attribution model (hurricane, wildfire, flood).

Result

Published integrated climate report: $4M tCO2e financed emissions, 4.2% of premiums from oil & gas sector, climate-related claims up 35% vs 10-year average. Announced: Exit coal underwriting by 2030, 50% reduction in oil & gas underwriting by 2035.

SASB Disclosure Topics for Insurance

Material sustainability topics beyond emissions that investors and stakeholders expect disclosed per SASB standards.

Financed Emissions from Investments

environment

Calculate Scope 3 Category 15 emissions from investment portfolio using PCAF methodology. Report tCO2e per $M assets under management and carbon intensity by asset class.

Underwriting Climate Risk Exposure

business model

Disclose gross premiums written for fossil fuel companies (coal, oil & gas). Report underwriting policies restricting coverage for coal-fired power plants, Arctic drilling, tar sands.

Physical Climate Risk and Claims

business model

Track climate-related P&C claims (hurricanes, floods, wildfires) as % of total claims. Report geographic exposure to high-risk regions and reinsurance coverage for catastrophic events.

Climate Risk Integration in Underwriting

governance

Disclose how climate scenario analysis (RCP 4.5, RCP 8.5) informs pricing models. Report use of catastrophe models incorporating climate change projections.

Green Insurance Products

business model

Report premiums from climate-linked products: renewable energy project insurance, EV insurance with lower premiums, green building insurance. Track % of total premiums.

Transition Risk in Investment Portfolio

business model

Disclose % of investments in high-carbon sectors. Report portfolio alignment with net-zero pathways and climate scenario stress testing results (potential losses under 2°C scenario).

NetNada tracks all SASB material topics, not just emissions. Our platform supports disclosure across environmental, social, governance, and business model topics relevant to your industry.

Insurance FAQs

Common questions about carbon accounting for this industry

How do you calculate financed emissions from an insurance investment portfolio?
Use PCAF methodology identical to asset managers: Listed equity = (Market value ÷ Company EVIC) × Company Scope 1+2 emissions. Corporate bonds = (Bond value ÷ Total debt outstanding) × Company emissions. Sovereign bonds = (Bond value ÷ Country GDP) × Country emissions. Real estate = Property-level energy consumption. Aggregate across holdings to get total portfolio financed emissions. Report as tCO2e per $M AUM for benchmarking.
Should we report financed emissions from policyholder premiums (underwriting) or just investments?
PCAF focuses on financed emissions from investments (Scope 3 Category 15) because insurers deploy capital into portfolio holdings. Underwriting is not 'financing' in PCAF sense—premiums are paid for risk transfer service, not capital deployment. However, best practice: report underwriting exposure separately as climate risk metric (% of premiums from fossil fuels, renewable energy), not as financed emissions.
How do we attribute climate-related P&C claims (hurricanes, wildfires) to climate change?
Attribution science shows increased frequency/severity. Method: Compare recent period (last 5 years) vs historical baseline (20-year average). Example: If wildfire claims averaged $50M/year historically, now $85M/year → $35M/year excess potentially climate-driven (assuming other factors constant). Disclose as: 'X% increase in weather-related claims vs historical average, consistent with climate projections.' Cite peer-reviewed attribution studies.
What's the difference between NZIA (underwriting) and NZAOA (investments) for insurers?
NZIA (Net-Zero Insurance Alliance) = commitment to reduce emissions from underwriting portfolios by engaging policyholders and restricting coverage for high-carbon activities. NZAOA (Net-Zero Asset Owner Alliance) = commitment to decarbonize investment portfolios. Insurers can join both. NZIA is newer (2021) and more controversial (several members exited due to antitrust concerns). NZAOA more established, follows PCAF financed emissions methodology.
Should we include reinsurance investments in our financed emissions?
Yes. Reinsurance investments held on balance sheet are included in PCAF Scope 3 Category 15. If you cede premiums to reinsurers, the reinsurer's investment emissions are in their scope, not yours. Report: (1) Financed emissions from your investment portfolio (direct holdings), (2) Note % of risk ceded to reinsurers. Some insurers also report 'look-through' emissions if reinsurer provides their portfolio carbon intensity.

Track Insurance Investment Emissions and Climate Risk Exposure

See how insurers calculate PCAF-compliant financed emissions, monitor underwriting exposure to fossil fuels, and report climate-related claims trends—automated.

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