Environmental, Social, And Governance (ESG)-Linked Insurance Market Projected to Strengthen in Value and Scale by 2030
What Is the Forecasted Market Size of the Environmental, Social, And Governance (ESG)-Linked Insurance Market by 2030?
The environmental, social, and governance (ESG)-linked insurance market size has grown exponentially in recent years. It will grow from $5.74 billion in 2025 to $7.20 billion in 2026 at a compound annual growth rate (CAGR) of 25.3%. The growth in the historic period can be attributed to increasing demand for sustainable insurance offerings, growing adoption of climate risk assessment, rising corporate focus on environmental, social, and governance (ESG) compliance, expanding integration of environmental metrics in underwriting, and increasing insurer participation in sustainable finance.
The environmental, social, and governance (ESG)-linked insurance market size is expected to see exponential growth in the next few years. It will grow to $17.57 billion in 2030 at a compound annual growth rate (CAGR) of 25.0%. The growth in the forecast period can be attributed to growing investments in renewable energy projects, rising emphasis on climate resilience strategies, increasing regulatory support for environmental, social, and governance (ESG)-linked insurance, expanding adoption of data-driven sustainability analytics, and rapid growth in governance-focused insurance models. Major trends in the forecast period include technology advancements in climate risk modeling, innovations in environmental, social, and governance (ESG) scoring platforms, developments in real-time environmental monitoring tools, research and development in green insurance products, and advancements in artificial intelligence (AI)-driven sustainability analytics.
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What Are the Major Growth Drivers for the Environmental, Social, And Governance (ESG)-Linked Insurance Market?
The increasing investor demand for sustainable investment products is expected to propel the growth of the environmental, social, and governance (ESG)-linked insurance market going forward. Demand for sustainable investment products refers to the rising interest from individual and institutional investors in allocating capital to funds, bonds, or investment vehicles that explicitly integrate Environmental, Social, and Governance (ESG) criteria. The rise in investor demand for sustainable investment products is due to growing awareness of social responsibility and the desire for long-term value creation aligned with ethical and sustainable practices. The ESG-linked insurance market supports this trend by offering insurance products that align with ESG principles or provide incentives for ESG-compliant behaviour, thereby embedding sustainability into financial and risk-management strategies. For instance, in April 2025, according to the Morgan Stanley Institute for Sustainable Investing, a US-based research organization, 88% of global individual investors expressed interest in sustainable investing, with 99% of Gen Z and 97% of millennial investors showing interest, and 59% of those investors plan to increase their allocation to sustainable investments over the next year. Therefore, the increasing demand for sustainable investment products is driving the growth of the environmental, social, and governance (ESG)-linked insurance market.
Rising Awareness Of Climate-Related Risks Fueling The Growth Of The Market Due To Increasing Demand For Sustainable And Risk-Responsive Insurance Solutions
The rising awareness of climate-related risks is expected to propel the growth of the environmental, social, and governance (ESG)-linked insurance market going forward. Climate-related risks refer to the financial, operational, and environmental threats posed by climate change, including extreme weather events, rising sea levels, and shifting regulatory and market pressures related to sustainability. The rise in awareness of climate-related risks is due to increasing visibility of extreme weather events and scientific reports clearly linking them to human-driven climate change. ESG-linked insurance supports awareness of climate-related risks by offering policies that integrate environmental, social, and governance (ESG) criteria, incentivizing sustainable practices, and providing financial protection against climate-related losses. For instance, in October 2025, according to the Ministry of Energy Security and Net Zero, a UK-based public administration authority, overall awareness of Net Zero greenhouse gas emission targets reached 91% in Summer 2025, up from 89% in Spring 2025, while general knowledge had risen to 53% by Spring 2024 and has remained stable. Therefore, the rising awareness of climate-related risks is driving the growth of the environmental, social, and governance (ESG)-linked insurance market.
Which Segments Are Likely to Shape the Future Outlook of the Environmental, Social, And Governance (ESG)-Linked Insurance Market?
The environmental, social, and governance (esg)-linked insurance market covered in this report is segmented –
1) By Product Type: Climate Risk Insurance, Green Property Insurance, Renewable Energy Project Insurance, Sustainable Supply Chain Insurance, Environmental, Social, And Governance (ESG) Performance-Linked Liability Insurance, Carbon Reduction-Linked Insurance, Sustainable Agriculture Insurance, Clean Energy Technology Insurance
2) By Coverage: Transition Risk Coverage, Physical Climate Risk Coverage, Liability And Litigation Coverage, Reputational Risk Coverage, New Technology Performance
3) By Distribution Channel: Direct Sales, Brokers And Agents, Online Platforms, Bancassurance, Corporate Partnerships
4) By Application: Corporate Environmental, Social, And Governance (ESG) Compliance, Green Investments, Renewable Energy Projects, Sustainable Supply Chains, Other Applications
5) By End User: Large Corporations And Multinationals, Small And Medium Enterprises (SMEs), Financial Institutions And Asset Managers, Renewable Energy Projects, Infrastructure And Real Estate
Subsegments:
1) By Climate Risk Insurance: Extreme Weather Coverage, Flood And Storm Protection, Drought And Heatwave Coverage, Sea Level Rise Protection, Natural Disaster Loss Mitigation
2) By Green Property Insurance: Eco Building Coverage, Energy Efficient Property Protection, Sustainable Renovation Coverage, Green Retrofit Insurance, Low Carbon Footprint Property Coverage
3) By Renewable Energy Project Insurance: Solar Energy Project Coverage, Wind Energy Project Protection, Hydropower Project Insurance, Geothermal Project Coverage, Bioenergy Project Protection
4) By Sustainable Agriculture Insurance: Organic Farming Coverage, Crop Diversification Protection, Water Conservation Insurance, Soil Health Risk Coverage, Eco Friendly Farming Practices Insurance
5) By Environmental, Social, and Governance (ESG) Performance Linked Liability Insurance: Environmental Liability Coverage, Social Responsibility Liability Protection, Governance Risk Liability Coverage, Compliance And Regulatory Liability Insurance, Reputation Risk Protection
6) By Carbon Reduction Linked Insurance: Carbon Offset Project Coverage, Emission Reduction Initiative Insurance, Low Carbon Technology Protection, Carbon Credit Risk Coverage, Greenhouse Gas Mitigation Insurance
7) By Sustainable Supply Chain Insurance: Supplier Risk Protection, Logistics And Transportation Coverage, Sustainable Procurement Insurance, Ethical Sourcing Risk Coverage, Circular Economy Supply Chain Insurance
8) By Clean Energy Technology Insurance: Renewable Technology Equipment Coverage, Smart Grid Technology Protection, Energy Storage System Insurance, Sustainable Transport Technology Coverage, Low Emission Technology Protection
Which Major Trends Are Expected to Define the Environmental, Social, And Governance (ESG)-Linked Insurance Market Through 2030?
Major companies operating in the ESG-linked insurance market are focusing on technological and strategic advancements, such as advisory and risk transfer services, to help organizations manage environmental, social, and governance risks while aligning insurance solutions with sustainability objectives. Advisory and risk transfer services encompass expert guidance on ESG risk assessment, strategic planning, and tailored insurance products that transfer or mitigate financial exposure related to sustainability challenges, enabling companies to improve resilience and achieve long-term sustainable outcomes. For instance, in May 2025, Tokio Marine Holdings Inc., a Japan-based global insurance group, launched a dedicated Green Unit aimed at expanding its ESG-linked insurance offerings and supporting sustainable business practices. The unit is designed to provide comprehensive advisory services on climate and ESG risk management and develop innovative risk transfer solutions that align with clients’ environmental and social objectives. The initiative targets significant growth, with an eye toward generating USD 1 billion in revenues by 2030, reflecting rising demand for insurance products that integrate sustainability criteria into underwriting, risk management, and strategic planning.
Which Companies Are Recognized as Major Innovators in the Environmental, Social, And Governance (ESG)-Linked Insurance Market?
Major companies operating in the environmental, social, and governance (esg)-linked insurance market are Allianz SE, AXA SA, Zurich Insurance Group Ltd., Assicurazioni Generali S.p.A., The Allstate Corporation, Chubb Limited, Liberty Mutual Holding Company, Tokio Marine Holdings, Münchener Rückversicherungs-Gesellschaft AG (Munich Reinsurance Company), Aviva plc, The Travelers Companies Inc., American International Group Inc., Sompo Holdings Inc., Swiss Reinsurance Company Ltd., Moody’s Corporation, The Hartford Financial Services Group, MSCI Inc., Berkshire Hathaway Specialty Insurance Inc., SCOR SE, CNA Financial Corporation, Society of Lloyd’s, Concirrus Ltd.
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Which Regional Markets Are Likely to See the Most Significant Expansion in the Coming Years?
North America was the largest region in the environmental, social, and governance (ESG)-linked insurance market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the environmental, social, and governance (esg)-linked insurance market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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