Insurance as a Scope 3 Climate Lever: Reframing EV Underwriting in the Sustainability Transition

The role of financial institutions in climate governance is increasingly being recognized, particularly in relation to Scope 3 emissions. While existing research has focused primarily on lending and investment activities, the potential influence of insurance operations on lifecycle emissions remains underexplored. This study examines electric vehicle (EV) insurance underwriting as a form of indirect climate governance, with particular attention being paid to claim-related decision processes that affect repair-, replacement-, and battery-related outcomes. A decision-analytical, scenario-based portfolio model is developed to analyze how underwriting and claims parameters may influence lifecycle emissions exposure. The model incorporates literature-informed and scenario-based parameter ranges derived from the lifecycle assessment literature and industry-relevant assumptions, while explicitly accounting for regulatory, technical, and behavioral constraints that limit insurer decision making. An exposure-based attribution framework is applied to link insurance-mediated outcomes to emissions associated with vehicle and battery manufacturing. The results suggest that claim-related parameters—particularly total-loss probability—are associated with variations in modeled emissions exposure within the analytical framework. Scenario analysis indicates that, under plausible parameter configurations, differences in claims decision structures may contribute to variation in lifecycle emissions at the portfolio level. Sensitivity analysis further indicates that these relationships appear stable across a range of parameter assumptions. The findings should be interpreted as scenario-based insights rather than empirical estimates, highlighting potential pathways through which insurance operations may influence emissions outcomes within existing constraints. The study contributes to the literature by extending Scope 3 governance analysis to insurance and by proposing an operational framework for interpreting insurance-associated emissions in lifecycle terms.