The insurance industry think tank, the Geneva Association, released the report “Expediting Sectoral Decarbonization: Strategic Implications for the Insurance Industry” that focuses on the decarbonization pathways of emissions-intensive sectors, including oil and gas, aviation, steel, cement and concrete, data centers, and buildings. These sectors account for a significant share of global emissions and share common barriers such as high energy intensity, long-lived assets, and complex infrastructure dependencies. Decarbonization is now a near-term priority, driven not only by climate concerns, but also by energy security, geopolitical pressures, and economic competition. The report looks at how these sectors are cutting emissions and what it will take to accelerate the adoption and scaling of decarbonization technologies – providing lessons learned and takeaways for many sectors.
Risk experts from Liberty Mutual’s Global Risk Solutions team contributed to the report. Below are some key takeaways: Where are industries making progress, and where do challenges remain? Decarbonization is already underway: Most sectors are focused on proven measures such as energy efficiency, operational improvements, electrification, and process optimization.
- Getting to net zero will require new technologies at scale: Heavy-emitting sectors increasingly depend on CCUS, hydrogen, sustainable aviation fuels, and other emerging solutions that are not yet fully mature.
- Heavy industry and aviation are the hardest sectors to decarbonize: Efficiency gains alone are insufficient; long-term emissions reductions rely on carbon capture and low-carbon fuels.
- The transition creates significant investment and risk-management needs: Scaling these technologies will require substantial capital, infrastructure development, and innovative insurance and risk-sharing solutions.
What strategies can industries use to decarbonize?
There’s no one-size-fits-all solution. Near-term gains are mostly coming from efficiency, while longer-term progress will rely on scaling technologies like green hydrogen and carbon capture and storage. The report identifies a portfolio of seven key strategies being deployed across sectors, depending on technological maturity and cost:
- Operational and energy efficiency improvements
- Electrification
- Use of fossil fuels with carbon capture, utilization, and storage (CCUS)
- Diversified low- or zero-carbon energy mixes
- Waste management and circular economy approaches
- Supply chain management and Scope 3 emissions reduction
- Carbon market mechanisms
What structural barriers are limiting the pace of decarbonization?
Despite increasing momentum, the report highlights four structural challenges limiting the pace and scale of decarbonization:
- Integrating climate resilience: New low-carbon infrastructure is increasingly exposed to physical climate risks such as extreme weather and water stress.
- Fragmented policy and regulation: Inconsistent standards, incentives, and liability frameworks create uncertainty for investors and developers.
- Limited cross-sector collaboration: Many emerging technologies require complex, multi-stakeholder projects across industries and geographies.
- Underdeveloped carbon markets: A lack of standardized frameworks and credible methodologies limits the ability to mobilize capital at scale.
Addressing these challenges will be essential to accelerating deployment and ensuring that decarbonization pathways are both resilient and economically viable.
How are insurers moving beyond risk transfer to support sectoral decarbonization?
A key focus of the report is the expanding role of insurers and reinsurers in supporting the transition. As industries adopt new technologies and business models, they face a broader range of risks – including construction, operational, supply chain, regulatory, and long-term environmental liabilities. In response, insurers are moving beyond traditional risk transfer to become strategic partners in decarbonization efforts. Their contributions include:
- Assessing risks across the full project lifecycle
- Supporting project design and resilience through risk engineering
- Developing innovative risk-sharing mechanisms such as blended finance and guarantees
- Helping improve project insurability and access to capital
By engaging earlier in projects, insurers can help make emerging low-carbon technologies more “bankable” and scalable, accelerating investment across sectors.
Why does decarbonization matter for resilience, investment, and competitiveness?
The transition to a lower-carbon economy is reshaping risks and creating both challenges and opportunities. Companies that don’t adapt face rising climate-related disruptions, while those that move early can tap into new markets. For insurers, this shift presents an opportunity to expand beyond risk transfer and support investment and resilience across industries.
Looking ahead - What will it take to scale decarbonization in a resilient and insurable way?
The report concludes that the challenge is no longer whether decarbonization will happen, but whether it can scale quickly in a way that is resilient, viable, and insurable. Achieving this will require stronger coordination across governments, industries, and financial institutions – along with continued innovation. Insurers are expected to play a growing role in enabling the transition.
For more information and insights, read the full paper.
