European life insurers to boost ESG investment

A survey of European life insurance companies that collectively oversee €2.73 trillion in assets, commissioned by AlphaReal, the specialist manager of secure income real assets, reveals 92% plan to increase their allocation to investments with a positive environmental and social impact, while the remaining 8% say they will do so in the near future.

Of those European life insurers planning to increase their investments in assets with a positive environmental impact, half plan to do so by between 15% and 20% over the next two years. A quarter (26%) will increase by 10% to 15%; nearly a fifth (18%) will increase allocations by 20% to 25%; 5% say they will increase by 25% to 30%; while 1% will boost allocations between 5% and 10%.

Looking at increases to assets with a positive social impact, 40% of life insurers say those increases will be between 15% and 20% over the next two years; more than a quarter (27%) will increase by 20% to 25%; 22% will increase by 10% to 15%; 8% by 25% to 30%; and 3% will make an increase of between 5% and 10%.

ESG considerations are ‘very important’ for 22% of respondents to the survey and ‘important’ for more than three-quarters (77%); while only 1% say they are neutral on ESG issues. 

This is reflected in the high level of support respondents show to meeting Europe’s net zero carbon emissions target by 2050. Nearly all (94%) European life insurers interviewed by AlphaReal have a carbon net zero commitment while the remaining 6% plan to put one in place in the near future.

Maria Vaggione, Senior ESG Associate at AlphaReal said: “AlphaReal has long invested in real assets that support the transition to net zero and that deliver positive outcomes to society. We have deployed more that £1.2 billion into social infrastructure and almost £1 billion into clean energy projects that are making a genuine difference to the future of our planet. We are being recognised in the industry for our strategies and their contributions to the planet and society, and recently received ‘European ESG Fund Manager of the Year’ at the Funds Europe Awards.”

Edward Palmer, CIO, Joint-Deputy CEO and Head of Sustainability at AlphaReal said: “The insurance industry is essential in helping to drive investment in long term projects such as green energy and social infrastructure, including affordable housing, schools and hospitals. This research shows the importance placed by the sector in providing the necessary capital to support progress towards environmental and social goals.”

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