The Portuguese Insurance and Pension Funds Supervisory Authority (ASF) published the third edition of its annual report assessing how exposed Portugal’s insurance sector and pension funds are to climate transition and physical risks, based on a 31 December 2024 reference date. The report reviews transition risk in investment portfolios across sovereign debt, corporate debt and equities and, for insurers, physical risk exposure through non-life fire and multi-peril liabilities focused on wildfire and flood. Across sovereign debt portfolios, average climate scores increased year on year under the Bloomberg methodology (0–10 scale, where lower scores denote higher risk), rising to 6.2 for insurers’ non unit-linked portfolios (from 6.0), to 6.0 for unit-linked (from 5.8) and to 6.1 for pension funds (from 5.9). Among the five largest sovereign exposures across the two sectors, only one issuer had an overall climate score below the European Union average, while Portugal’s score rose from 5.9 to 6.1. For corporate debt, transition risk exposure fell in 2024 as the share of debt issued by lower-carbon-intensity companies (below 25 metric tonnes CO2e per USD million of revenue) increased to just over 50% of insurers’ portfolios and 46% of pension funds’, although around 16% of mapped corporate debt still carried Bloomberg environmental scores below 4 (out of 10) across both sectors. In equities, the insurance sector’s environmental score profile improved while pension funds’ deteriorated, with the share of scores below 4 rising from 17% to 29%, but equity holdings remained a small share of total portfolios, particularly for pension funds (3%). On physical risks, ASF updated market sums insured to 2024 and estimated total exposure of EUR 1,010bn for the fire and multi-risk portfolio, up 11.7% from the 2022 reference value; wildfire risk was concentrated in specific inland and central municipalities but the national housing segment score was “Medium”, while flood risk scores were assigned to about 94% of the portfolio (excluding islands and unknown locations) and 86% of capital scored below 0.5 on a 0–1 scale. ASF notes that the analysis is framed as a diagnostic of current exposure rather than scenario-based impact quantification, and highlights data constraints that prevented inclusion of additional asset classes such as investment funds and real estate. The report also points to further work on more granular georeferenced data and potential future reflections on national catastrophe coverage instruments and prudential guidance, alongside expected shifts in sustainability information flows linked to ongoing European reforms to the Sustainable Finance Disclosure Regulation and the Sustainability Omnibus package, as well as the applicability of the European Union’s ESG ratings regulation from July 2026.

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