The rise in corporate sustainability practices has led to an increase in demand for insurance products that mitigate environmental risks. A GlobalData survey reveals pressure from customers and investors are the main drivers for setting up environmental, social, and governance (ESG) performance plans.
According to GlobalData’s Strategic Intelligence: ESG Sentiment Polls Q4 2024, 44.6% of respondents cite pressure from customers as the primary reason why a company should set up an ESG performance plan, with 29.9% selecting pressure from investors as the main reason. As customer expectations shift towards sustainability, companies face growing risks of damaging their reputation if they fail to meet these standards.
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In February 2025, global insurer Mosaic—with a stated aim to be the “top, most trusted environmental carrier”—launched a new combined environmental product that integrates primary commercial general liability with pollution and professional coverage. Amid growing ESG concerns, more companies will look at environmental insurance as a viable part of their ESG performance plan to protect themselves against the risk that their activities will damage the environment. The new product offers extensive coverage for premises, operational, product, pollution, and professional exposures, all while remaining financially competitive.
The challenge for insurers is balancing risk exposure with affordability. Increased scrutiny of environmental practices means higher potential liabilities, which could drive up the cost of premiums. As more businesses integrate sustainability practices into their operations and insurers gather more data on environmental claims, underwriting models will improve. This in turn will lead to more tailored and cost-effective policies. With demand for environmental insurance increasing, it is in insurers’ best interests to develop competitive, accessible coverage that meets the evolving needs of businesses.
