Environmental Approach of Foreign Investment Insurers

Macro investing often leads to human rights and environmental challenges. Sustainable investment emphasizes the necessity of foreign investment sustainability and acting within the framework of environmental and social norms. Indeed, Environmental and social assessments are considered a prerequisite for an investment projects’ insurance by foreign-investment insurers, such as OPIC and MIGA. In other words, projects which are not compatible with environmental or social norms are not supported by these institutes. While the projects are being carried out, these institutions monitor them and if any incompatibility with environmental or social norms occurs, the continuance of the insurance coverage will be challenged. Despite these two institutions approach, compatibility of a foreign-investment project with environmental or social norms is not a legal requirement for its insurance. Nonetheless, it can be argued that the insurer must not insure the projects, when there are serious environmental risks or fundamental human rights may be affected as, it would seem that a soft law is forming on the necessity of environmental assessments and not granting insurance coverage to such projects. This paper intends to examine the role of foreign-investment insurers in protecting the environment.