Expediting Sectoral Decarbonisation: Strategic implications for the insurance industry

The transition to a low-carbon economy is unfolding under unpredictable conditions, amid geopolitical crisis, economic pressure and polarised climate-change debate. Governments are rebalancing priorities – placing greater weight on energy security, affordability, and competitiveness, alongside decarbonisation. While this does not lessen the urgency of climate action, it does change the path to progress, with important implications for risk management and the insurance sector. 

This report examines how decarbonisation is advancing across emissions-intensive sectors – oil & gas, aviation, steel, cement & concrete, data centres and buildings – and the role insurers play in enabling these transitions. While sustained investment in areas such as operational efficiency and waste management is moving the transition forward, large, complex projects to adopt emerging, low-carbon energy technologies are also accelerating. These projects introduce new technical, financial, liability and regulatory risks. As a result, conventional approaches to underwriting and risk transfer are being challenged.

Our analysis points to four conditions that will shape insurability at scale: stable, coherent policy environments; closer collaboration between project developers, investors, insurers and governments; integrating climate resilience in decarbonisation plans; and credible carbon markets. Where these conditions are absent, the gap between the needed pace and scale of transition and the availability of insurance cover can hinder progress.

Insurers are stepping forward as risk carriers and partners to shape resilient, investable low-carbon systems. This requires developing a whole new set of capabilities: targeted R&D efforts, innovative risk-sharing schemes, multidisciplinary teams, fresh-talent acquisition, and strategic cross-sectoral partnerships. Insurers are moving with enthusiasm and determination to put these capabilities in place. 
 

Jad Ariss
Managing Director

Against a backdrop of increasingly polarised climate politics, governments are refocusing transition strategies on energy security, industrial competitiveness, and secure access to critical and rare earth minerals. Decarbonisation policy support, while varying by jurisdiction, is increasingly directed toward nuclear energy, carbon capture, utilisation, and storage (CCUS), renewables combined with long-duration energy storage (LDES), smart grids, and carbon-linked trade measures.

Geopolitical shocks to oil and gas supply, such as the 2026 conflict in the Middle East and the closure of the Strait of Hormuz, reinforce that energy security and the energy transition are inseparable. Energy resilience could be enhanced with diversified domestic clean energy production, supported by storage, distribution, and energy efficiency. At the same time, such tensions could also disrupt critical minerals and supply chains, highlighting the importance of building robust clean energy supply chains.

Economic sectors such as energy (e.g. oil and gas), transportation (e.g. aviation, shipping, and trucking), industrial production (steel, cement, aluminium, and chemicals), data centres and buildings account for a significant portion of greenhouse gas (GHG) emissions. Beyond being energy intensive, a range of other shared characteristics also explains both their high emissions and the difficulty in reducing them. For example, such sectors require continuous and reliable power, operate long-duration assets, and have system dependence and infrastructure constraints. Although challenges persist, private-sector decarbonisation is progressing; the key question is how to scale and accelerate this progress while ensuring lasting resilience. 

Five global developments are paving the way for sectoral decarbonisation: 

First, new partnerships are securing access to critical and rare earth minerals through co-investment, offtake agreements, and frameworks such as the US–Australia Critical Minerals Agreement. Second, global investment in technologies for production of zero- and low-carbon energy has continued to grow, reaching a record USD 2.3 trillion in 2025, up 8% year-on-year, despite geopolitical and trade headwinds. Third, public-private sector collaborations are accelerating the deployment of nascent climate technologies for deep decarbonisation, including CCUS hubs (e.g. Northern Lights), green hydrogen gigaprojects (e.g. NEOM) and small modular reactors (SMRs). Fourth, carbon credit markets are maturing, with tighter integrity standards and growing demand for high-quality, technology-based removal credits, to mobilise early demand for and investments in low-carbon technologies. Fifth, private-sector industry-specific platforms are enabling coordinated actions to expedite scaling of decarbonisation and resilience solutions for sectors such as oil and gas, cement and concrete, steel, and buildings.

Sector-specific decarbonisation is well underway within the private sector, using a portfolio approach combining various strategies, deployed with differing priorities and over different time horizons.  

These include energy and operational efficiencies and alterations, electrification, reliance on fossil fuels combined with CCUS, an energy mix combining a range of low- or zero-carbon energy production options, waste management and circularity, supply chain management, and utilising carbon credit markets or similar sector-specific schemes to mobilise capital.

The implementation of sector-specific decarbonisation strategies depends on the development and deployment of a wide range of technologies and approaches, exposing companies to new risks, which need to be assessed and managed. This provides insights on the evolving needs of each sector for insurance products and services, to implement their respective priorities.

 
Interviews and roundtables with leading experts across six industries (oil and gas, data centres, aviation, steel, cement and concrete, and buildings) have revealed that sectors are advancing decarbonisation but at different speeds and levels of ambition. For each, concrete short-, medium-, and long-term priorities, aligned with respective decarbonisation strategies, have been identified, offering valuable insights into where investments are being focused today and how these are expected to evolve over time.

While some approaches, focusing on areas such as operational and energy efficiency, will lead to evolutionary changes, others such as shifting the energy mix for deep decarbonisation have the potential to lead to transformative changes in the core business models in these sectors. As companies confront associated challenges and emerging risks, the implementation of these strategies will also shape evolving, sector-specific needs for insurance products and services.
 

There are four noteworthy common challenges experienced across these sectors in implementing projects for deep decarbonisation, which key stakeholders – including re/insurers – could work together to tackle. 

1. Integrating climate resilience in decarbonisation strategies is an emerging concern across sectors. This is not only to protect assets, operations, and workforce, but also to re-prioritise decarbonisation strategies to mitigate credit risks related to potentially stranded assets. Preventive approaches are needed to protect new low-carbon assets, operations, and supply chains.
    
2. There is a need for clear and stable public policy and regulatory frameworks. Across sectors, unclear, fragmented, and misaligned public policy and regulatory frameworks remain a core bottleneck to decarbonisation and resilience. Gaps in risk-based land management and zoning – and the slow adoption and enforcement of updated building codes, as well as permitting and liability regimes – increase transition and liability risks, constraining insurability, risk sharing, and subsequently investments.
    
3. New cross-sectoral collaborations and process reforms are needed with profound implications for industry, governments, re/insurers, and investors. Deep decarbonisation increasingly depends on complex, capital-intensive projects spanning multiple sectors, jurisdictions, and value chains, creating new risks and coordination challenges. Six transformative approaches are needed:
   
   i.    Adopting a project life-cycle view for the mapping of untested risks, stakeholder roles and liabilities, contractual agreements, and risk-mitigation measures would allow re/insurers to assess cascading risks and exposures. For example, a project life-cycle approach within CCUS projects would include design, construction, and operations across sequestration, transportation, storage, and closure stages. 
   
   ii.    Stronger coordination among energy, environmental, financial, and insurance regulators to align policy, liability, and capital regimes would provide greater certainty for developing effective risk sharing and project financing.
   
   iii.    Reforming project-finance processes to enable early engagement of re/insurers’ risk engineers to help improve project design and mitigation measures would enhance insurability and bankability for project developers and lenders. 
   
   iv.    Embedding climate resilience into technology choices, project siting, and asset design would reduce long-term operational, credit, and stranded-asset risks for asset owners and investors alike. 
   
   v.    Expediting the development of emerging technologies’ supply chains, involving a complex network of suppliers, manufacturers, developers, and service providers, would accelerate the scaled deployment of such technologies.
   
   vi.    Adopting and implementing a systems-based approach to developing standards and codes of practice are critical to project replication and scaling. This should address all aspects such as risk identification, mitigation, allocation, contracts, supply chains, data transparency, safety, compliance, and decommissioning.
    
4. Mobilising private-sector investment requires expediting the development of credible and certified technology-based carbon credits and sector-specific carbon-reduction schemes. Divergent methodologies, accounting rules, and credibility criteria create uncertainty for all stakeholders. Convergence on standards, monitoring, reporting, and verification (MRV) practices and governance frameworks are needed.
   
    

Sector-specific decarbonisation priorities and requirements, as well as their common challenges, have strategic implications for the insurance industry. 

Accelerating sectoral decarbonisation needs a wide range of new technologies to be developed, scaled, and adopted by a wide range of stakeholders, within and across many sectors, affecting business models over the coming years. The insurance industry can play a key role in supporting sectors through this transition.

The implementation of sectoral decarbonisation strategies exposes companies to a wide range of emerging risks, such as technology, construction, supply-chain, product liability, stranded-asset, regulatory, and long-tail environmental liability risks. While each sector’s approach and needs for insurance and financing services varies, common threads across their decarbonisation strategies have implications for the insurance industry and investors. This will have profound implications for re/insurers and the dynamics of insurance markets.

By assessing sectoral decarbonisation priorities over the short, medium, and long term across various sectors, re/insurers can proactively identify emerging areas of expertise and technical knowledge they need to build and support sectoral transitions. This approach enables them to develop tailored risk management strategies and offer insurance products and services that facilitate sectoral transformations. 

The scale up of capital-intensive, pre-commercial technologies for the production of clean or low-carbon energy and the development of robust supply chains presents a clear growth opportunity, positioning re/insurers not only as risk carriers, but also as strategic risk advisors, enablers of investments, and partners for setting standards. As investors, re/insurers can leverage blended finance, guarantees, and innovative risk-sharing structures to crowd in private capital and improve risk-adjusted returns. 

Re/insurers can capture these opportunities through:

• Sustained investment in research and development (R&D) in emerging technologies for sectoral decarbonisation, advanced risk analytics, and forward-looking, location-specific modelling of physical and transition risks;
   
• Organisational restructuring, enabling multidisciplinary cross-functional teams engaging early with clients. 
   
• An evolution from transactional underwriting to a more strategic and integrated approach in delivering innovative risk engineering, risk-sharing, and risk-transfer solutions. 
   
• Deeper cross-sectoral partnerships to co-develop risk-mitigation and risk-sharing solutions, expediting the deployment and adoption of pre-commercialised technologies for clean or low-carbon energy production.
   
• Supporting the development of standards for project replication and exploration of ways to address uninsurable development through other means, such as public-private partnerships or even the government as the insurer of the last resort.
   
• A renewed focus on attracting and retaining talent aligned with sectoral needs and priorities.

Finally, collaboration among regulatory bodies overseeing insurance and other sectors is required to develop liability regimes. Capital requirements that could lead to viable risk-sharing models among the stakeholders, particularly to expedite the scaled deployment and adoption of emerging technologies for deep decarbonisation, are also needed. 

Against a backdrop of increasingly polarised political debates, recent policy and regulatory developments have refocused national transition priorities towards energy security,1 industrial competitiveness,2 and access to robust supply chains.3 For example, in the US, the 2025 One Big Beautiful Bill Act marks a pivot away from broad-based wind, solar, and electric vehicle (EV) incentives4 towards targeted, longer-term support for CCUS,5 nuclear and geothermal energy6^,7 energy infrastructure, as well as robust access to critical materials.8 Japan’s 7th Strategic Energy Plan, approved by the Japanese Cabinet in February 2025, elevates nuclear and renewables as core pillars of decarbonisation and energy security, while China and Australia continue backing renewables combined with energy storage.9^,10 EU regulations continue to prioritise rapid wind and solar expansion, grid upgrades, and energy storage, keeping nuclear and green hydrogen as complementary rather than core decarbonisation drivers.11^,12^,13 Importantly, the EU Carbon Border Adjustment Mechanism (CBAM) enters into full force in 2026, embedding carbon costs into trade, strengthening incentives for low-carbon steel, cement, aluminium, and hydrogen.14 Country-specific measures, such as increasing flight taxes and green subsidies in France, are also being implemented.15

Beyond climate policies, geopolitical tensions such as the 2026 Iran conflict could affect major energy-transit corridors, such as the Strait of Hormuz, underscoring persistent vulnerabilities in global energy security and supply chains. These international tensions demonstrate how energy security and the energy transition are fundamentally interconnected. Diversified domestic clean and low-carbon energy systems, supported by robust storage, distribution, and energy efficiency, enhance resilience to external shocks. Geopolitical disruptions can also impede progress by constraining access to critical minerals, materials, shipping routes, and key project inputs, reinforcing the critical need to build clean energy supply-chain resilience.

Despite increasing private sector initiatives and investments, speeding up scaled decarbonisation of economic sectors with inherently high greenhouse gas (GHG) emissions remains a key challenge. Sectors spanning industrial production (steel, cement and concrete, aluminium, and primary chemicals), energy (oil and gas), and transport (aviation, shipping, and trucking), together account for approximately 40% of global Scope 1 and 216 greenhouse gas emissions (see Figure 1).17 The energy use of buildings accounts for a further 26% of global GHG emissions.18 The rapid expansion of large-scale data centres, driven by digitalisation, cloud computing, and expectations of rising demand for artificial intelligence (AI), is sharply increasing their electricity use (see Box 1). While data centres currently account for about 1% of global energy-related emissions, even conservative projections suggest this could nearly double by 2030 if current trends continue.19

Figure 1: Global GHG Emissions (Scope 1 and 2) by sector

Copy link to this sectionDownload

Note: In this chart, the 26% attributed to buildings refers solely to global GHG emissions from operational energy use (e.g. heating, cooling electricity) and does not represent the sector's full life-cycle emissions, including embodied carbon in materials and construction. Similarly, the 1% attributed to data centres reflects emissions from operational energy consumption only, and excludes embodied emissions, upstream supply-chain impacts, and end-of-life considerations.

Source: Geneva Association, based on World Economic Forum 2024, 2025, and IEA 202420
 

Source: Geneva Association, based on various sources22
 

Several common characteristics explain both the large GHG emissions of these sectors and the challenges to reduce them (see Figure 2). 
 

Figure 2: Factors contributing to SECTORS' HIGH GHG emissions and challenges with reducing them

Copy link to this sectionDownload

Source: Geneva Association

Several promising developments are paving the way for sectoral decarbonisation: 

1. Public-private partnerships and bilateral cooperation initiatives aim to secure access to critical and rare earth minerals. 
   
   Building on recent national critical material strategies,23^,24^,25^,26 collaboration between industries and governments is advancing across the critical and rare earth minerals value chain,27 through targeted policy alignment, risk-sharing mechanisms, and joint investments.28 Governments are de-risking mining and processing by offering public co-investments, loan guarantees, offtake agreements, and price floors that improve bankability for early-stage and first-of-a-kind projects, while streamlining permitting and coordinated infrastructure support in remote regions.29 Industrial policy, fiscal incentives, and partnerships with trusted allies are helping to build domestic and allied supply chains, through strategic agreements and bilateral frameworks, such as the US-Australia Critical Minerals Framework Agreement.30 Innovation, recycling, and circularity are being mobilised via joint research and development (R&D) funding and through public–private initiatives to recover materials from end-of-life products.31
    
2. Global investments in climate technologies for low-carbon energy production are on the rise, with some nuances.
   
   Global investments in clean or low-carbon energy production reached a record USD 2.3 trillion in 2025 (see Figure 3), up 8% year-on-year, despite geopolitical and trade headwinds.32 
    

Figure 3: Global energy transition investment by sector, 2020–2025

Copy link to this sectionDownload

Source: BloombergNEF 202633
 

Notably, both public and private investors continued to scale-up funding.34^,35 Low-carbon energy supply investments exceeded fossil fuels for the second consecutive year.36 In 2025, electrified transport-led investments (USD 893 billion), followed by renewables (USD 690 billion), were the most significant investment categories.37
 

3. Cross-sectoral public-private collaborations are being forged to expedite scaled deployment of nascent climate technologies, essential for the energy transition. 

   Public- and private-sector initiatives are underway through regulatory harmonisation and public-private partnerships to expedite scaled deployment of the next wave of climate technologies needed for changing the energy mix and enabling deep decarbonisation, such as CCUS,38 green hydrogen,39^,40 long-duration energy storage (LDES),41 and small modular nuclear reactors (SMRs).42

4. Carbon credit markets are advancing, but with many nuances

   Carbon markets are systems where carbon credits are bought and sold, each credit representing a unit of GHG emissions reduced or removed by a project.43 Project developers earn income by selling these credits to finance projects that cut emissions, for example through energy efficiency improvements, forest conservation, wetland restoration, and carbon-removal technologies that would otherwise struggle to secure funding. Companies buying these credits use them to help meet climate regulatory requirements, alongside other efforts to cut their own emissions (Box 2).

   Over the last few years, rules for GHG reduction claims associated with carbon credits have tightened with rising demand for more robust accounting.44 New integrity frameworks are pushing for stricter criteria in areas such as permanence of carbon removal and prevention of double counting, which is raising expectations of project quality across the market.45 Over recent years, the market has moved from large volumes of cheap, lower-quality credits toward fewer but higher-integrity units.46

    

 Source: Geneva Association, based on various sources47
 

5. Sectoral collaborations are being forged to expedite decarbonisation

   Sector-specific platforms are enabling intra- and cross-industry collaborations to accelerate the development, scaling, and financing of practical decarbonisation and climate resilience solutions. Table 1 highlights examples of such platforms in oil and gas, steel, cement and concrete, buildings, data centres, and aviation, which are the target sectors for this study. 
    

TABLE 1: EXAMPLES OF SECTORAL PLATFORMS FOCUSED ON DECARBONISATION AND RESILIENCE SOLUTIONS 

Source: Geneva Association 

Focusing on six key sectors (oil and gas, steel, cement and concrete, aviation, data centres, and buildings), this report explores sectors’ receptivity, strategies, and priorities for business decarbonisation; the associated challenges and opportunities; and ways in which the insurance industry could support commercial clients to enable and expedite their decarbonisation plans. The objectives of this study are to:
 

1. Present the latest trends and more concrete insights on sector-specific, short-, medium- and long-term decarbonisation priorities.
    
2. Examine sectors’ perspectives on the impacts of physical climate risk on their core business, particularly in the context of incorporating robust climate resilience in their decarbonisation business models.
    
3. Identify common challenges among sectors for expediting more resilient, deep decarbonisation and how these can be overcome.
    
4. Explore overall strategic implications for the insurance industry. 
    

The research methodology has involved:

• An in-depth literature review.
   
• Interviews and roundtable discussions with leading international experts from the six sectors, in collaboration with the sectoral platforms highlighted in Table 1.
   
• Four roundtables with the project advisory committee, comprised of leading experts from Geneva Association member companies, listed in the acknowledgements. 

Section 2 examines sector-specific decarbonisation strategies and priorities, providing insights on current and future areas of focus and related emerging risks. Section 3 examines common challenges among sectors to expedite deep decarbonisation strategies, also taking into account the impacts of slow-changing climatic trends and the intensification of extreme weather. Section 4 takes a deeper dive into future strategic implications for the insurance industry. 

Sectoral decarbonisation follows a portfolio approach involving a combination of seven strategies (see Figure 4). These include operations, electrification, combining fossil fuels with CCUS, evolving energy mix with low- or zero-carbon energy production options, waste management and circularity,48 supply chain management, and the use of carbon credits or similar schemes to mobilise upfront investments in decarbonisation solutions.

Figure 4: Portfolio of strategies used for sectoral core business decarbonisation

Copy link to this sectionDownload

Source: Geneva Association

Examples of sectoral activities and their impacts for the implementation of various decarbonisation strategies are highlighted in Table 2.

TABLE 2: EXAMPLES OF ACTIVITIES AND THEIR IMPACTS IN THE IMPLEMENTATION OF DECARBONISATION STRATEGIES 

Discussions with leading experts from sectoral platforms (see Table 1) have identified clear short-, medium-, and long-term priorities across the six target sectors, aligned with the seven decarbonisation strategies, thereby clarifying key areas of focus for each sector (see Annex 1). Specifically, each sector requires the deployment and adoption of a wide range of new technologies and approaches with varying complexities to implement its respective decarbonisation strategy.

This transition introduces complex operational, technological, and financial challenges that expose companies to emerging risks requiring careful assessment and management, driving evolving demand for new insurance products and services. While many of these new technologies and activities that are focused on areas such as operational and energy efficiency will lead to evolutionary changes in their core business, others – such as scaling up CCUS and shifting the energy mix for deep decarbonisation – have the potential to lead to transformative changes, significantly impacting their needs for new insurance products and services.64
 

Sectoral interviews revealed four common challenges hindering sectoral decarbonisation efforts (see Figure 5).
 

Figure 5: Common sectoral challenges hindering the implementation of decarbonisation strategies

Copy link to this sectionDownload

Source: Geneva Association, based on interviews with sectoral experts
 

Discussions with representatives from the six sectors and further research confirm rising concerns with the impacts of the intensification of extreme weather events65 and slow-changing climatic trends66 on their core business and their decarbonisation strategies. For example, as billions of dollars in public and private funding are being invested to accelerate the commercial deployment of climate technologies and related infrastructure systems, choices around where and how to build new assets and operations will be critical to ensure their resilience and insurability over their full life cycle. These issues are highlighted in Table 3.
 

TABLE 3: COMMON SECTORAL CONCERNS ASSOCIATED WITH INTENSIFICATION OF EXTREME WEATHER AND SLOW-CHANGING CLIMATIC TRENDS AND IMPLICATIONS

Source: Geneva Association, based on interviews with sectoral experts and various sources 

Implications for re/insurers: P&C re/insurers could invest in developing forward-looking stochastic climate risk assessment tools and provide risk advisory services to help sectoral clients’ prioritisation of retrofit investments and development of phased, cost-effective plans for existing assets and operations. In addition, these services could support decarbonisation investments, for example, with site selection, asset design, and incorporation of risk-mitigation measures for new assets and operations. Through underwriting incentives, re/insurers can also promote resilient design and adaptive technologies, reducing disruptions, preserving long-term insurability, and lowering stranded asset risks. Re/insurers could also support supply-chain resilience by mapping supplier concentration and exposure to extreme weather and slow-changing climatic trends. They can pre-assess alternative suppliers and logistics routes through risk engineering.

Discussions with sectoral representatives emphasised that the lack of clear, coherent, and well-aligned public policy and regulatory frameworks remains a critical bottleneck to accelerating sectoral decarbonisation. For example, in the buildings sector, risk-based land-use planning and zoning, alongside updated and enforceable building codes for low-carbon and climate-resilient buildings are essential to enabling green, resilient buildings, and reducing transition and liability risks.82 Re/insurers could work with governments to develop green and resilience incentives, leverage government rebates as well as achieve a shared understanding of hazards, identify regions facing insurance affordability pressures, and prioritise high-impact resilience and green-building investments. In parallel, market uptake and scaled use of low-carbon concrete and alternative binders in construction depend on the timely development and enforcement of building standards that allow for the safe use of these new materials. 

A key challenge highlighted in the interviews is the urgency to accelerate their deep decarbonisation,83 which relies on companies gaining access to ­commercial-scale technologies like CCUS and production of low- or zero-carbon energy. Experiences from these sectors have revealed that as industrial projects scale, they become increasingly complex, involving multiple stakeholders with diverse roles, risk exposures, liabilities, and regulatory requirements. These projects could span jurisdictions with differing policy and regulatory regimes and rely on underdeveloped supply chains. This further amplifies the need for more coordinated risk identification and risk management to reduce risks for all stakeholders and enable scaled upfront investments. This is illustrated for CCS84 clusters in the EU in Box 3.
 

Geneva Association research and a recent ­multi-stakeholder R&D initiative85 have indicated that early engagement among project owners and developers from economic sectors, engineering, procurement, and construction (EPCs) firms, re/insurers (particularly risk-engineering teams), investors, sector-specific policymakers, and regulators could deliver significant benefits, including:
 

1. Improved data availability, knowledge sharing, and transparency.
    
2. More integrated and holistic approach to mapping risks, taking into consideration the project value chain86 and cascading effects.
    
3. Earlier identification and alignment of risk-mitigation measures across stakeholders.
    
4. Development of risk-sharing mechanisms that help unlock financing.
    
5. Identification of gaps in risk-transfer and financing solutions.
    
6. Design of public-policy and regulatory frameworks that support scalable deployment.
    

Together, these outcomes would strengthen project bankability, enhance insurability, and accelerate the responsible scaling of complex projects. 
 

Box 3: Europe’s CCS clusters

 

In Europe, industrial clusters are developed around a single, shared carbon capture, transportation, and storage infrastructure to manage and reduce their combined GHG emissions. A complex ecosystem of stakeholders, with different roles and liabilities, enables capture, transportation, utilisation, storage, and closure. The interconnectedness of stakeholders is illustrated in three cases in Figure 6 including: HyNet in Northwest England and North Wales; Aramis in the Netherlands; and Northern Lights in Norway. Importantly, a single incident in a critical part of the system, for example, a major event on an offshore platform that forces a prolonged halt in CO₂ injection would stop CO₂ transport to the storage site and effectively block the entire system. This could trigger losses related to property damage and/or business interruption for the offshore operator, pipeline companies, and each emitter unable to send CO₂ to storage. These accumulated losses, together with others, such as lost revenue from the inability to claim carbon credits, need to be considered as part of the total insured exposure. Interconnectivity and risk accumulation are major concerns in large industrial clusters.
 

Figure 6: CCS clusters – Hynet, Aramis and Northern Lights

Copy link to this sectionDownload

 

1. Northern Lights – an open and flexible CCS infrastructure that aims to transport CO2 by ship from capture sites across Europe (purple dots) to a terminal in Norway for intermediate storage, before transporting it for permanent storage in a reservoir under the seabed (operational 2025).
    
2. HyNet – a project in the North West of England that combines a low-carbon hydrogen transportation and storage network (blue lines and dots) to supply energy-intensive industrial gas users and a pipeline to capture up to 95% of emissions from industrial processes (orange lines and dots) and to be piped to a permanent storage in Liverpool Bay (expected to be operational by 2028).
    
3. Aramis – CCS infrastructure that will enable connections to several European clusters (purple dots), transporting CO2 through pipelines, ships and barges, collected at a hub in the Netherlands, transported by an off-shore pipeline at sea and injected and stored below the seabed (expected to be operational by 2028).
    

 

Copy link to this sectionDownload

 

Copy link to this sectionDownload

Source: Geneva Association, based on various sources87

The experiences of sectors engaged in the development and deployment of deep decarbonisation technologies are also pointing to the need for transformative cross-sectoral approaches to help expedite scaled deployment for market adoption. These are highlighted in Table 4.

TABLE 4: SIX TRANSFORMATIVE APPROACHES TO EXPEDITE SECTORAL ADOPTION OF EMERGING TECHNOLOGIES FOR DEEP DECARBONISATION, WITH IMPLICATIONS FOR KEY STAKEHOLDERS AND THE INSURANCE INDUSTRY

Source: Geneva Association, based on interviews with sectoral experts

The development of credible and certified, technology-based carbon credits is essential to mobilise private-sector investments in decarbonisation projects. While technology-based carbon credits, such as those related to engineered carbon removals and CCUS, are attracting growing interest, scaling remains constrained by the high costs and limited supply of such technologies, concerns with the long-term durability of carbon-storage systems, as well as the need to further develop high-quality monitoring, reporting and verification (MRV) practices, and certification systems.90^,91^,92

Furthermore, a range of sector-specific carbon offsetting and reduction schemes are emerging based on similar principles, but often with differing methodologies, boundaries, and accounting assumptions, such as CORSIA in aviation and the book-and-claim model for cement (as highlighted in Table 2). These are being developed by industry and third parties to mobilise early demand for, and investments in low-carbon production. While these schemes are beyond the scope of this report, discussions with sectoral representatives indicate a consensus or common approach to thesentation, reduce the risk of double counting or greenwashing, and improve confidence for re/insurers, investors, and regulators assessing these mechanisms. 

Re/insurers could support this process by providing risk assurance and due diligence on integrity, MRV, permanence, and long-term liability risks; offering guarantees and parametric solutions to enable early demand and financing; and engaging with standard-setting bodies to support convergence and governance.93
 

Sectoral decarbonisation is underway within the private sector, as different sectors, with varying levels of application, use a portfolio approach to enable transition within their core business (see Figure 4). As described in this report, a deeper dive into the short-, medium-, and long-term priorities of each target sector allows re/insurers to anticipate evolving needs for insurance-related products and services to support expediting decarbonisation strategies. As sectors implement these strategies, they need to assess and manage a wide range of emerging risks such as technology, construction, supply-chain, product liability, stranded-asset, regulatory, and long-tail environmental liability risks. 

While each sector’s approach and needs for insurance and financing services vary, there are common characteristics across their decarbonisation strategies, with implications for the insurance industry and investors. For example, achieving deep decarbonisation through low- and zero-carbon energy sources, and ensuring access to robust, credible carbon credit markets and other sector-specific financial mechanisms, all require strong intra- and inter-sectoral collaborations. 
 

At a time of mounting cost pressures and intensifying competition, re/insurers face strategic choices about how to proactively support clients through early engagement in the transition. Geopolitical shocks and resulting energy instability heighten the need for resilient decarbonisation and energy systems. Re/insurers can help embed resilience into the design, development, and financing of clean energy systems and supply chains – reducing exposure to external shocks while accelerating the energy transition.

The expertise of re/insurers could be significantly leveraged if they directly engage with project owners and governments to co-assess risks and co-develop risk-sharing solutions. Building climate resilience is another critical common concern, particularly as companies and sectors invest massively in new assets, operations, and infrastructure systems. At the same time, advancing deep decarbonisation will require close collaboration among re/insurers and a broad set of stakeholders, as no single organisation can address these shared challenges alone. This carries important strategic implications for the evolving dynamics of insurance markets.
 

Re/insurers are critical enablers of their corporate clients’ decarbonisation journeys. The scaling and broad adoption of many emerging technologies have profound implications for re/insurers, with each with distinct technical, operational, regulatory, and liability profiles: 
 

1. Medium- and long-term strategic opportunities: The implementation of concrete sectoral decarbonisation plans and accelerating scale up of capital-intensive, pre-commercial climate technologies for deep decarbonisation represents a growth opportunity for re/insurers. The latter requires finding efficient pathways to engage directly, through their risk-engineering experts with project owners, investors, and governments from pre-commercialisation stages. As these technologies move from pilot to commercial deployment, they generate demand for advanced risk engineering, innovative risk-sharing structures, and new risk-transfer solutions that can help unlock private capital and improve bankability. Re/insurers are increasingly positioned not merely as risk carriers, but as critical enablers of investments and risk-management partners supporting the development of various standards for project replication.
    

2. Research and development: The energy transition underscores the necessity of investing in targeted R&D, as well as building internal technical capabilities to support commercial clients. With the steady emergence of new technologies across various sectors, they face a diverse set of risks related to technical performance, market adoption, resource constraints, and liability frameworks. These challenges require the implementation of advanced analytical methods and comprehensive risk-mitigation strategies needing new expertise. Traditional risk-transfer structures may also be ill-suited to these contexts, creating the need for new risk-sharing solutions.

   Insurability itself is becoming more tightly coupled with climate resilience. Intensifying extreme weather and slow-onset climatic shifts already affect where assets can be built, how long they remain economically and operationally viable, and whether they can remain insurable over their life cycle. This also calls for the development of forward-looking, location-specific modelling of both physical and transition risks. 

3. Organisational structure and governance: From an organisational perspective, clients point to the need for re/insurers to transition internal institutional and business-line silos towards a more integrated governance framework, enabling early involvement of multidisciplinary teams across various business units, with corporate clients during project design and development. These teams may engage experts from various functions such as risk engineering, underwriting, as well as legal. 
    

4. Strategic cross-sectoral partnerships: Partnerships could be forged through early and sustained collaboration with project developers, financiers, technology providers, and governments. This is becoming critical to mapping risks upfront, innovating risk-sharing models and risk-transfer solutions, and supporting the development of policies and regulatory and liability regimes. However, mechanisms for such early direct engagement need to be developed.

   Furthermore, the ability to engage multi-disciplinary teams with standard-setting bodies, manufacturers, and suppliers, could help expedite the development of standards spanning early risk identification, risk mitigation, risk allocation and risk sharing, contracts and processes, supply-chain collaboration, data transparency, safety and regulatory compliance, and decommissioning.

5. Talent acquisition and retention: Building internal capacity to engage proactively with corporate clients and other stakeholders may challenge re/insurers’ ability to acquire and retain talent. For example, demand for risk engineers and cross-disciplinary experts is rising sharply, reflecting the complexities and the wide range of new technologies that need to be scaled and adopted by various sectors. Competition for such talent is intensifying, requiring re/insurers to rethink recruitment, training, strategic engagement with universities and technical institutions, as well as long-term knowledge-retention strategies.
    
6. Development of new products and services: Investments in new products and services is essential for strategic positioning. Engaging early with project developers in different sectors could lead to access to high-resolution risk data for assessing cascading risks, insurability, and capital mobilisation. Forward-looking stochastic climate models are needed for assisting corporate clients in prioritising retrofit investments for current assets and investments in new assets. Re/insurers are increasingly acting as risk advisors and conveners, not merely as underwriters. Risk-engineering services are no longer ancillary; they are central to re/insurers’ strategic positioning. System-level, long-duration risks are driving the need for bespoke, integrated risk sharing, and risk-transfer solutions.
    
7. Evolving market dynamics: These sectors seek to interact directly with re/insurers; however, opportunities for such engagement appear to be limited. Supporting corporate clients’ deep decarbonisation requires a shift from transactional underwriting to a more strategic delivery of innovative risk engineering, risk-sharing, and risk-transfer solutions. This calls for new distribution models that enable re/insurers’ risk-engineering teams to work directly with project owners, investors, and other stakeholders at the project level from early stages.
    
8. Investment strategies: Today, re/insurers’ investment in deep-decarbonisation projects remains limited due to high capital requirements, uncertain technology pathways, unstable policy frameworks, regulatory constraints, and fiduciary obligations. Innovative risk-sharing arrangements, blended finance, and government-backed guarantees can improve risk-adjusted returns and help crowd in private capital from highly regulated institutional investors such as re/insurers and pension funds.
   
    

Source: Geneva Association, based on interviews and roundtables held by the GA with representatives from the World Steel Association, Mission Possible Partnership, the Climate Neutral Data Centre Pact, GCCA, and World Green Building Council