Insurance-linked strategies (ILS) are a mainstay in sustainability-focused investing, offering a structured approach to pricing climate risks through insurance policies. By facilitating financial protection and incentivizing proactive climate mitigation and adaptation measures, ILS contribute to the broader effort to address climate change. As climate-related catastrophic events become more frequent, the demand for ILS has grown, with the EU Taxonomy recognizing catastrophe protection as a sustainable investment activity.

This new paper published by LGT Capital Partners provides a comprehensive overview of the regulatory framework governing ESG considerations within ILS with a focus on the SFDR and the EU Taxonomy. It also examines the alignment of ILS with the requirements of Article 8 funds under the SFDR and offers an insight into the firm’s own portfolio, highlighting how its strategies adhere to these regulatory standards.