Captives can play a significant role in helping organisations achieve their environmental, social and governance objectives, according to FERMA. While their primary role remains risk financing, captives may be used in multiple ways to embed ESG initiatives into everyday insurance and risk management strategies, the organisation says.

Captives can embed KPIs into underwriting to improve risk analysis, support initiatives through investment strategies, and provide insurance for transition-related risks where standard coverage is limited. Socially, captives can expand employee benefits, embed social KPIs to incentivise best practices, and fund targeted initiatives. On governance, captives demonstrate structured oversight, embed processes, incentivise better practices and use technology to enhance overall risk management.

Today, FERMA is publishing practical guidance on integrating ESG commitments into day-to-day operations. The ESG Toolbox for Captives guide is not “a rulebook”, FERMA insists, but a source of ideas to stimulate discussion and inspire action amongst captive owners.

Laurent Nihoul, chairman of the Captive Committee, said: “The ESG toolbox emphasises flexibility over rigid standards, aiming to promote greater dialogue and encourage creative thinking around captives and ESG strategies, while helping captive owners design and implement their own solutions. By reimagining routine re/insurance and risk management activities as opportunities for making an impact on ESG initiatives, captives can turn risk financing into a strong driver of sustainability.”

Philippe Cotelle, president of FERMA, added: “FERMA is committed to sharing knowledge and promoting innovation, and through this report we want to explore how captives can play a strategic role in supporting ESG transformation. By embedding ESG into insurance and risk financing activities, captives can translate sustainability goals into practical action, strengthen their parent organisations’ ESG commitments, while driving long-term value and fostering responsible growth.”

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