The recent move by certain large insurers to stop writing thermal coal risks is not expected to result in a meaningful loss of business, even as insurers face increased exposure to environmental, social and governance risks, Moody’s Investors Service Inc. said Monday in a report.

Weather events driven by climate change, social pressures such as increased regulatory focus on treating customers fairly, and governance issues that can potentially lead to significant fines or reputational damage can all affect insurers’ ability to meet their financial obligations, New York-based Moody’s said in the report.

While not new for insurers, these risks have become more significant in recent years due to evolving regulations and policy measures, climate change and shifting demographics, Moody’s said in the report.

A growing number of insurers, focused on sustainable finance, are implementing investment and underwriting measures guided by their own assessment of environmental, social and governance risks, Moody’s said.

For example, large insurers including Swiss Re Ltd., Axa SA, Aviva PLC, Allianz SE, Zurich Insurance Group Ltd., QBE Insurance Group Ltd. and Scor SE recently decided to stop insuring certain clients in thermal coal-dependent industries, the rating agency said.

“While thermal coal is a relatively large sector, we do not expect large diversified insurers’ thermal coal exclusionary policies to result in a meaningful loss of business,” Moody’s said in the report.

“These insurers could, in fact, benefit from reduced exposure to potential environmental liability risks associated with thermal coal industries,” it said in the report.

Moody’s said it expects more insurers to follow suit as environmental, social and governance risks become more immediate, and as regulatory and public focus on them intensifies.

“While environmental, social and governance factors have only had material credit implications in a limited number of cases, we are increasingly focused on the strategies insurers are adopting to manage the effects of climate change and demographic shifts, which we expect to become more material over time,” Moody’s said in the report.

Moody’s said it would expect more highly rated insurers to have more advanced analysis of environmental, social and governance risks, and more sophisticated strategies for managing them.

Property/casualty insurers and reinsurers “are more vulnerable to environmental risk, and life insurers are more susceptible to social risks, such as higher disability claims related to the opioid epidemic in the U.S.,” Moody’s said.

Insurers’ exposure to environmental, social and governance risks also varies by territory due to differences in natural, regulatory and social features across regions, Moody’s said in the report.

The ratings agency said it takes qualitative and quantitative environmental, social and governance factors into account, considering them in its overall analysis of credit drivers.