As catastrophic climate events set new records year after year, the insurance sector faces a fundamental shift. Risk itself is changing. But so too is opportunity. Decarbonizing investment and underwriting portfolios isn’t just an ecological responsibility, it’s fast becoming a business necessity.
The good news? The evidence is mounting that insurers can reduce emissions and boost long-term profitability at the same time.
The Business Case for Climate-Forward Insurance
Insurers occupy a unique seat of influence. They don’t just underwrite risk; they invest trillions into the global economy. That dual role gives them an outsized ability and obligation to accelerate the transition to a low-carbon world.
Done well, portfolio decarbonization delivers benefits on both sides:
Underwriting: Reduces exposure to carbon-heavy liabilities while strengthening relationships with clients committed to long-term resilience.
Investments: Positions insurers to capture returns from the surging demand for clean technologies and sustainable infrastructure.
The market is already signaling the shift. According to recent research, 93% of investors believe climate challenges will materially impact financial performance within the next five years. Companies that lag risk credit downgrades and declining value. Meanwhile, the “green stars” firms that decarbonize early often outperform their peers.
GreenFInT: A New Lens for Portfolio Decarbonization
To help insurers make this transition profitably, Accenture developed the Green Financial Institution Tool (GreenFInT) , a decision-making engine designed to connect sustainability goals with financial outcomes.
GreenFInT allows insurers to model the effects of corporate climate transition strategies (such as moving from fossil fuels to renewables) under multiple climate scenarios, from “business as usual” to a Paris-aligned 1.5°C pathway.
The tool supports:
Regulatory compliance (e.g., ESRS E1 KPIs, CARD)
Portfolio-wide emissions monitoring (Scope 3, Category 15)
Risk management and stress testing
Capital allocation decisions
Business case assessments that blend financial and environmental outcomes
How It Works
By analyzing a company’s technology mix and transition plan, GreenFInT generates projections around:
Capital expenditure needs
Operational cost shifts
Profitability curves over time
Consider two examples:
A “green star” utility might invest heavily in renewables upfront. Yes, the near-term costs are steep, but over time they enjoy lower operating expenses, stronger margins, and resilience to regulatory tightening.
A “climate laggard” might avoid near-term investment but ultimately suffers as fuel costs climb, carbon penalties tighten, and customers pivot away.
The Payoff: Green Stars Win Long Term
Accenture’s modeling of a sample portfolio of 40 high-carbon European firms (spanning power, steel, real estate, and automotive) showed:
Through 2030: Laggards may appear to edge out green stars by roughly 6% on EBIT margin.
By 2050: Green stars pull far ahead delivering 30–40 percentage points stronger performance.
This illustrates the “tragedy of the horizon” the Bank of England has warned of: too many decisions focus on short-term gains at the expense of long-term viability. Tools like GreenFInT extend insurers’ line of sight, enabling decisions that are both profitable and sustainable.
Why Insurers Must Act Now
If history proves anything, it’s that the insurance sector knows how to adapt. It has weathered financial crises, pandemics, wars, and more. Climate change is simply the latest and perhaps the most existential test.
By embedding climate data into underwriting and investment choices, insurers can:
Reduce long-term exposure to systemic risks
Meet tightening regulatory and reporting expectations
Avoid reputational harm from greenwashing
Strengthen trust with clients and investors
Unlock new growth opportunities in the low-carbon economy
GreenFInT doesn’t just measure emissions, it provides a roadmap for building portfolios that thrive in a net-zero future.
The Way Forward
Decarbonization isn’t a “someday” problem. Investors, regulators, and society at large already expect bold action. The insurers that act decisively today using advanced tools and data-driven insights will be best positioned to lead tomorrow.
The toolkit exists. The business case is clear. The only missing piece is execution.
Now is the moment for insurers to move from strategy decks to tangible action and in doing so, steer not just their portfolios, but the world, toward a more resilient and profitable future.
