GLOBAL INSURANCE COMPANIES DIDN'T JUMP ON the sustainability bandwagon just yesterday. For example, Lloyd’s published a report titled “Climate Change: Adapt or Bust” back in 2006. But for insurers, making sustainability part of their business and finding common ground in a fragmented market are easier said than done. Many environmental, social responsibility and corporate governance (ESG) issues are “too big and complex and need widespread action across society, innovation and long-term solutions,” says Astrid Zwick, head of corporate responsibility at Munich Re, which manages €248 billion ($320 billion) in assets.

So in June the United Nations Environment Program Finance Initiative (UNEP FI) and 30 insurers representing a total $5 trillion in assets launched the Principles for Sustainable Insurance (PSI) initiative, which seeks to fashion an industrywide ESG framework. Munich Re’s Zwick chairs the PSI commission. Last month the initiative held its first general meeting, with London-based Aviva, Swiss Re of Zurich and Japan’s Tokio Marine & Nichido Fire Insurance Co. among the attendees.

The PSI’s four main principles cover internal business practices, client relationships, government and social commitments, and transparency requirements. The initiative calls for making ESG considerations part of risk management, underwriting standards, responses to regulatory demands and investor reports.

The PSI seeks to address insurance companies’ complex risk models, as well as their corporate treasury and asset management divisions. This requires prescriptive guidelines, which are now being drafted. “To be truly effective, these principles would have to be implemented across lines of insurance and geographies,” says Butch Bacani, PSI program lead at the UNEP FI in Geneva. But doing that gets tricky in an industry that provides everything from health and casualty to marine and aviation insurance. Take marine insurance: Some clients are having trouble getting insurers to account for sustainability factors, while others haven’t met the same resistance.

Danish shipping giant Maersk Line has seen premiums drop thanks to its ESG program, which dates to 2008. “It is our experience that insurers want to work with sustainable and responsible companies and are prepared to offer differentiated pricing and cover on that basis,” says Lars Henneberg, Copenhagen-based head of risk and insurance at parent company A.P. Møller–Maersk Group. Maersk, which accounts for 16 percent of global container shipping, has adopted biofuels, given its fleet more-efficient engines and invested in social efforts like training.