Taking the lead in ESG is vital for insurers and brokers
By Content Director Saxon East
Environmental, social and governance factors (ESG) are defining corporate behaviour.
Everything from climate change to diversity and executive behaviour is broadly under the umbrella of ESG.
One of the challenges with ESG is that because it is so broad, it is hard to define and even harder to audit.
This was the view of industry executives at Insurance Times’ sister title Global Reinsurance’s roundtable on ESG earlier this month (March 2022), held at the Dubai World Insurance Congress (Dwic).
Raise an issue
There are some tangible parts of ESG which many responsible companies will follow.
One is the Task Force on Climate-related Financial Disclosure (TCFD).
TCFD was developed by an international body, the Financial Stability Board, in 2015.
It created a common standard on what companies should disclose to their shareholders, customers and staff in relation to climate issues.
There is also helpful guidance coming out now. For example, in January 2022, the Institute of Directors released a report on UK companies’ ESG priorites for 2022.
What came out of the roundtable in Dubai, however, is that companies should - as well as engaging with the most notable aspects of ESG, such as diversity, climate change and ethical investments - make a clarion call centred on one major issue.
Aviva, for example, has made an effective song and dance over ethical investment. This makes sense as Aviva is a large asset manager.
What Aviva has done well is gain prominence as a thought leader through some skilful public relations. It really is leading and shaping debate.
Employee welfare
An interesting area of ESG is employee welfare. This will have a profound impact on the quality of recruitment.
Society is moving towards improved welfare at work, accelerated by work from home models post-pandemic.
Therefore, nobody is going to want to join a company with a low rating on employee welfare.
Encouragingly, there have been increased employee welfare actions recently, such as improved paternity pay, four-day working weeks and help around staff mental health.
Wouldn’t it be great to see a major insurer or broker effectively promote this as a major part of the ESG agenda?
Maybe for once the insurance industry can take the lead. We live in hope.
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