Driving Sustainability in Zambia’s Insurance Sector: BIOFIN Equips CEOs with ESG & Green Finance Strategies

The Zambian insurance sector is entering a new era of sustainability, placing a strong emphasis on Environmental, Social, and Governance (ESG) principles and green finance. This transformation was underscored during a training workshop organized by the Pensions and Insurance Authority (PIA), with technical support from the United Nations Development Programme’s Biodiversity Finance Initiative (UNDP BIOFIN) and PwC Zambia on 18 February 2025 in Lusaka, Zambia. The workshop brought together Chief Executive Officers and Principal Officers from insurance and reinsurance companies, equipping them with insights on integrating ESG factors into their business models and investment strategies.

A Changing landscape: the role of ESG in insurance

ESG integration is no longer a peripheral concern but a strategic necessity for insurers. The session highlighted:

• The importance of identifying and managing nature and climate-related risks.
• Opportunities arise from sustainable finance instruments, including green bonds and biodiversity credits.
• The growing regulatory focus on ESG and its implications for Zambia’s insurance industry.

PIA Registrar and CEO, Mrs. Namakau Mundia-Ntini, opened the workshop by reinforcing the critical role of the insurance sector in managing risks associated with climate change and social inequalities. She stressed that ESG considerations have become central to sound business practices and responsible investment strategies.

Prudential Life Assurance Zambia CEO, Mr. Kachiza Kwenda, captured the essence of the training, stating, “We only get one chance to do things right, so the opportunity to learn about green financing and the entire ecosystem around reporting and how insurance can come through is exciting!”

Aligning with BIOFIN’s key objectives

BIOFIN’s involvement in this initiative aligns with its core objectives of advancing biodiversity, strengthening institutional capacity, and mobilizing financial resources for sustainability.

Biodiversity Result:

The workshop emphasized the role of the insurance sector in mitigating biodiversity risks. By integrating ESG considerations, insurers can support biodiversity conservation efforts through products like nature-based insurance, parametric insurance for climate risks, and investments in biodiversity credits. These mechanisms help safeguard Zambia’s rich biodiversity while enabling financial resilience.

Institutional result:

BIOFIN played a critical role in strengthening the regulatory and institutional framework for sustainable finance within the insurance sector. By providing technical support and capacity-building initiatives, BIOFIN is helping insurers align with global ESG reporting standards, such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Task Force on Climate-related Financial Disclosures (TCFD). Furthermore, Zambia’s adoption of the IFRS S1 and IFRS S2 sustainability disclosure standards for Publicly Accountable Entities (PAEs) ensures greater transparency and accountability in ESG reporting.

BIOFIN has also capacitated insurance entities on financial sector nature-related risks in the Zambian landscape, outlining potential financial exposures to biodiversity loss and climate change. This support helps insurers to not only assess and mitigate nature-related risks but also to leverage green financial instruments that align with sustainable development goals.

Financial result:

The workshop explored investment opportunities within green finance, helping insurers understand how to leverage sustainable financial instruments. Discussions included:

• Carbon and biodiversity credits, enabling insurers to engage as investors and underwriters of nature-positive projects.
• Green bonds and sustainability-linked investments, provide a pathway for insurers to finance climate-positive initiatives while ensuring profitability.
• Innovative risk management solutions that incorporate ESG factors, making insurance products more resilient and adaptive to environmental changes.

A step forward for Zambia’s insurance industry

The training workshop marked a significant step in the integration of ESG principles into Zambia’s financial sector. By strengthening insurers’ capacity in ESG and green finance, the industry is better positioned to navigate emerging risks, align with global best practices, and contribute to a more sustainable and nature-positive economy.

Exciting times lie ahead as Zambia’s insurance industry embraces sustainable finance.