From compliance to competitive edge: TechM’s ESG differentiator in insurance

Sustainability is now central to insurance. Climate risks, regulatory demands, and changing customer expectations require insurers to move beyond compliance-driven sustainability and embed Environmental, Social, and Governance (ESG) principles into their core operations. However, most insurers still struggle with manual ESG reporting, fragmented data, and outdated risk models (see Exhibit 1).

Exhibit 1: While ESG compliance mandates increase, enterprises still don’t believe ESG is among the top 3 delivering value and impact

Sample: 392 enterprise leaders
Source: HFS Research, 2025

The ESG edge TechM aims to provide

AI-driven ESG is complex, requiring insurers to process vast, unstructured climate, risk, and compliance data—a challenge that slows industry adoption. Most service providers offer basic compliance dashboards but lack insurance-specific AI, automation, and cloud integration to operationalize ESG at scale.

Tech Mahindra’s AI-driven climate risk modeling integrates satellite imagery, geospatial analytics, and catastrophe models for real-time risk assessment and dynamic pricing. Its AI-powered ESG scoring engine enhances underwriting and investment decisions, while its hybrid cloud ESG framework enables insurers to optimize IT workloads for sustainability.

By embedding AI, automation, and cloud-driven ESG intelligence, Tech Mahindra aims to help insurers turn ESG from a compliance burden into a competitive advantage.

AI-Powered ESG reporting driving compliance to action

Regulatory pressure is increasing, with insurers needing to comply with International Financial Reporting Standards (IFRS), Corporate Sustainability Reporting Directive (CSRD), and Task Force on Climate-related Financial Disclosures (TCFD) frameworks. Yet, ESG reporting remains largely manual and reactive, limiting its value.

Tech Mahindra’s AI-driven sustainability reporting platform, built on Palantir’s big data ecosystem, automates real-time ESG compliance for a leading global reinsurer. It enables insurers to streamline ESG data collection, generate real-time reports, and monitor carbon and governance risks across underwriting and claims. By replacing manual disclosures with dynamic AI governance, insurers can embed sustainability into core operations, not just compliance. AI-driven underwriting automation enables faster policy issuance, reducing processing time by up to 70%.

Embedding ESG in insurance operations

Tech Mahindra is on the path to moving beyond compliance by integrating AI, automation, and cloud intelligence into underwriting, claims, and IT infrastructure to help enterprises deliver measurable impact.

• AI-driven climate risk modeling: Uses satellite data and catastrophe models to enhance underwriting insights and dynamic risk pricing.
• Real-time ESG scoring: Embeds AI-powered ESG insights into underwriting to improve risk evaluation and policy decision-making.
• Sustainability-optimized hybrid cloud: Enables insurers to optimize IT energy usage and enhance operational efficiency.
• Carbon-aware cloud management: AI-driven workload automation lowers emissions and IT costs.
• Automated ESG compliance: AI-powered tracking streamlines ESG reporting and enhances regulatory compliance.
• Faster ESG-linked claims: Cloud acceleration enhances claims automation and sustainability-driven claims processing.

With the above types of technology, Tech Mahindra aims to embed ESG directly into underwriting, policy development, and claims management. This includes developing ESG-linked insurance products that reward businesses for adopting sustainable practices, leveraging AI-driven ESG scoring to incorporate sustainability risks into underwriting decisions, and automating sustainability impact assessments in claims to encourage eco-friendly repairs over replacements.

How these solutions jumpstart the ESG journey

Insurers are moving beyond traditional ESG reporting to embed sustainability across their operations. ESG-linked insurance products reward businesses for sustainable practices, while AI-powered ESG scoring integrates real-time sustainability data into underwriting, improving risk assessment and policy pricing. In claims management, automated carbon footprint tracking helps insurers promote green supply chains and eco-friendly repairs, ensuring that sustainability becomes a core part of risk management and customer engagement rather than just a compliance requirement.

Closing the ESG gap: What comes next for sustainable insurance

While Tech Mahindra has made substantial progress, insurers must expand their ESG strategies beyond climate risk modeling to include social and governance risk assessment, sustainable claims management, and policyholder engagement. With CSRD, IFRS, and TCFD frameworks driving stricter ESG mandates, insurers require AI-driven tools to streamline compliance, manage ESG risks, and improve sustainability performance

1. Enhancing social and governance factors in ESG: AI-driven tools to quantify supply chain ethics and corporate governance risks.
2. Expanding ESG integration in underwriting: Real-time dashboards integrating sustainability data into risk pricing models.
3. Scaling ESG in claims management: AI-powered frameworks to promote green supply chains, low-carbon repairs, and fraud detection.
4. Personalized ESG engagement for policyholders: AI-driven insights to offer sustainability rewards and behavioral incentives.

The Bottom Line: As insurers accelerate toward net zero and ESG-driven underwriting, the time to act is now. TechM is leveraging AI and automation to transform ESG from a regulatory burden into a business differentiator.

Insurers must focus on integrating ESG into insurance by standardizing data, ensuring regulatory clarity, and adopting scalable AI. Legacy IT systems, fragmented ESG data, and evolving compliance standards make real-time implementation difficult for service providers like TechM. AI models struggle with inconsistent, self-reported ESG data, while privacy laws limit policyholder engagement analytics.

Tech Mahindra’s AI-driven ESG solutions aim to help insurers operationalize sustainability at scale, integrating real-time insights into decision-making. However, to drive seamless ESG adoption at scale, they must enhance AI capabilities and strengthen partnerships.