Four in 10 insurance businesses across the global have reassessed their environmental, social, and governance (ESG) goals due to social trends such as the Black Lives Matter and #MeToo movements.
This is according to data obtained by Health & Protection from a survey by global law firm DWF.
The findings also showed 37% were re-examining their ESG goals because of the pandemic and 48% said ESG had become more important over the past 12 to 18 months.
The survey, of 480 senior executives in 13 countries, also found 28% of insurance leaders felt the ESG performance of their own company was “weak”, while around two thirds (65%) also said that poor ESG performance was affecting their company a great deal, in comparison to an average of 59% of executives across all companies surveyed.
Notably, 42% of insurance companies across the globe said they found recruiting key talent difficult because their ESG policies were seen as “weak”, in comparison to 40% of all companies.
And just 30% of insurance sector executives said they had fully considered the ethical and legal implications relating to ESG disclosure and commitments, whereas across all sector, the figure was slightly higher at 35%.
The results comes as the health and protection sectors are becoming more conscious of the need to understand ESG issues and meet tightening regulations.
Last week, law firm Hill Dickinson warned the private healthcare industry it must avoid greenwashing as it becomes more aware of carbon reduction targets and the need to become more environmentally responsible.
Involve all employees
The Association of British Insurers (ABI) emphasised that it was important insurers involved people from across their organisations in ESG aims.
Ben Howarth, manager for climate change and open data policy at the ABI, added: “The insurance and long-term savings sector has a crucial role to play in both helping society adapt to the impact of climate change and supporting the transition to net zero as both underwriters and major international investors.
“The ABI’s Climate Change Roadmap sets out the commitments firms are already making and shows how our sector can play a leadership role across the wider economy.
“This important research from DWF highlights why including colleagues from across the organisation as firms develop their strategies on climate change and ESG is so vital.
“The ABI and its members are committed to working with industry peers, government and regulators to ensure the industry’s approach extends beyond regulatory compliance to pro-actively supporting innovative approaches to climate risk management and this research highlights a number of areas that this work will need to prioritise.”
Recognise long-term risks
Kirsty Rogers, global head of ESG at DWF, said: “The clear message from our survey is that companies not only understand the need to have a strategy for ESG, but that without one there are clear long term risks and liabilities.
“These costs could include damage done to their business to the point of affecting their licence to operate.
“While there is a cost to transitioning to a more sustainable business, it is a necessary investment for people, the planet and ultimately profit.
“It is clearer than ever that businesses have a huge role in driving the global transition, while also improving social issues and driving progress on governance, and insurance companies understand this. To achieve their goals, they need a clear, ambitious and transparent ESG strategy.”
Claire Bowler, head of the insurance sector at DWF, added: “There is increasing pressure on insurance companies to meet market expectations and subsequently stakeholders are often requesting ESG information from their suppliers.
“There has been a huge spotlight on insurance over the last 24 months compared to other sectors and it has unfortunately resulted in companies losing business as a result. Insurance companies know they need to catch up and there is increased and necessary engagement from board level right across organisations.”