Insurance-linked securities: how to make them ESG friendly

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By Jasper Cox
04 Mar 2020

The World Bank and Assicurazioni Generali are each giving the insurance-linked securities (ILS) they issue a sustainability label, as the market attempts to burnish its credentials for investors concerned with environmental, social and governance (ESG) criteria. Both issuers are imitating conventional green bond programmes by focusing on direct use of proceeds, but there are also debates around issues such as freed-up insurance capital and what governments do with funds released from catastrophe bonds.

Generali, the Italian insurance firm, released a green ILS framework last week, matching its efforts in the conventional green bond market, where it has issued a tier two bond.

Meanwhile, the World Bank has marketed its latest cat bond — which will give Mexico coverage against ...

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