ESG Governance and Stakeholder Trust in Insurance: A Review of Emerging Practices
Abstract
This study explores the role of Environmental, Social, and Governance (ESG) governance practices in shaping stakeholder trust and enhancing institutional performance within the insurance sector. Using a desktop review methodology, the study synthesizes scholarly and industry literature published between 2018 and 2024 to assess how ESG integration influences financial resilience, risk management, regulatory compliance, stakeholder engagement, and technological innovation. The findings reveal that insurers that embed ESG principles into their operations consistently outperform their counterparts in return on equity, risk preparedness, and stakeholder loyalty. ESG adoption also improves regulatory adaptability and facilitates access to green capital markets. However, the study identifies persistent challenges, including fragmented disclosure standards, ESG data limitations, and resource gaps, particularly among small and mid-sized insurers. The paper applies Stakeholder Theory, Legitimacy Theory, and the Resource-Based View to contextualize ESG as a strategic asset rather than a compliance burden. The study concludes that institutionalizing ESG governance is essential for long-term viability and recommends harmonized disclosure frameworks, targeted capacity-building, digital infrastructure investment, and strengthened stakeholder communication. These findings offer both theoretical contribution and practical guidance for insurers, policymakers, and sustainability advocates.
Keywords: ESG governance, stakeholder trust, insurance sector, financial resilience, risk management, sustainability, regulatory compliance, desktop review.
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