Mohamed Omran, Chairperson of the Financial Regulatory Authority (FRA), said that adherence to environmental, social, and governance standards related to sustainability helps insurance companies thrive.
He stressed that the good management of these obligations would reformulate the strategies of insurance companies and push them to make well-thought-out investment decisions. It will also encourage them to seize investment opportunities in line with the world’s growing interest in implementing the principles and goals of sustainable development.
Omran added that the members of the initiative “Sustainable Insurance for the United Nations Environment Program” can play an important role in building more sustainable economies, especially in the countries most affected by the negative effects of climate change through capacity-building and the formation of public and private partnerships.
He stressed that as a result of the insurance activity being distinguished by its ability to mobilize savings and re-employ them, which in Egypt amounted to about EGP 131bn at the end of the fiscal year 2021, the total investments of 41 insurance companies, the sustainable insurance activity gained attention and lined up to launch joint work in the face of the dangers of climate change. This enhanced the ability and enthusiasm of insurance companies to innovate, and even make amendments to their vision and business strategies, with a focus on raising awareness of environmental, social and governance issues related to sustainability. This reinforced the contribution of the insurance industry at the local and global levels in building a flexible, comprehensive and sustainable society.
This came during an interview with the Chairman of FRA in a documentary film that monitors, over the past ten years, the efforts made by the sustainable insurance initiative of the United Nations Environment Program since its launch in 2012. It came as a result of the largest cooperation between the United Nations and the insurance sector around the world. He commented on the efforts of the UN initiative to reduce greenhouse gas emissions and the key role the global insurance industry plays in addressing issues related to nature, and supported the implementation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
This comes at the time of the meetings hosted by the Swiss city of Zurich on the occasion of the 10th anniversary of the launch of the Sustainable Insurance Initiative of the United Nations Environment Program during the period from 19 to 21 June 2022.
During the interview, the chairman of the authority demanded the participants in the COP27 conference to be more specific about the tasks required of companies operating in the field of non-banking financial activities, and companies to achieve a balance between their traditional goals of generating profits for key stakeholders (including shareholders) and their strategies to be based on the principles of sustainability and their duties in light of the regulators’ adoption of a vision that ensures that all financial flows are in line with achieving zero carbon emissions. Moreover, given that financial markets respond to the signals issued by regulators, their investment decisions will reveal how serious they are when in terms of Green and environmentally friendly, which leads to reducing carbon emissions.