Environmental campaigners have called on the insurance industry to ramp up its efforts to tackle climate change.

Friends of the Earth said that while the UK's largest insurers and brokers were taking steps to reduce their own carbon emissions, it urged them to examine their investment portfolios and look at ways they can influence the carbon footprint's of their policyholders.

The comments followed an Insurance Times investigation into how the 10 largest insurers and brokers are working to tackle carbon emissions. It revealed that on the surface progress is being made.

Most common steps include recycling and energy efficiency schemes, supporting green initiatives and setting up in-house teams in a bid to move closer to becoming carbon neutral.

Royal & SunAlliance (R&SA) announced it became carbon neutral at the end of last year and has set group targets for 2007, which include reducing travel emissions by 10% and air travel by 20%.

Aviva revealed its commitment to become the first insurer to carbon neutralise on a worldwide basis.

Among the broking community, Aon has taken steps to minimise its environmental impact and has implemented video conferencing throughout its global network, in a step towards reducing travel related emissions.

Hannah Griffiths, corporate campaigner for Friends of the Earth, said although the market is taking steps in the right direction there was room for improvement.

Griffiths said: "They all seem to be tackling one main area, but it would be interesting to see how they invest their money. If they invest in companies, which have a huge climate impact the emissions from their own offices are a drop in the ocean.

"They are all making steps in the right direction but could exert more pressure on policyholders to reduce their own carbon emissions, perhaps by offering reduced premiums."