FERMA has published new guidelines designed to support the development of consistent and transparent sustainability-linked insurance solutions across the market.

The organisation said that as sustainability-linked insurance continues to evolve, the need for a shared understanding and consistent application has become increasingly important. SLI products link insurance terms, such as pricing or coverage features, to the achievement of predefined sustainability objectives. Without clear guidance it says, inconsistent practices or unsubstantiated claims could undermine market confidence.

The Sustainability-Linked Insurance Principles aim to address this by providing a common framework for designing, implementing, and evaluating SLI solutions, while aiming to safeguard market integrity and enhance trust among stakeholders. While voluntary, the framework details clear expectations for key performance indicators, sustainability performance targets, contractual structures, reporting, and verification processes.

Philippe Cotelle, president of FERMA, said: “Sustainability-Linked Insurance must be built on clarity, consistency, and purpose. By establishing robust principles, we can ensure these solutions are credible, measurable, and aligned with recognised sustainability goals, while avoiding fragmentation across the market.

“FERMA’s aim is not only to help strengthen these insurance frameworks but also empower risk managers and insurers to play an increasingly meaningful role in advancing resilience, supporting long-term value creation, and contributing to a more sustainable global economy.”

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