2021 Focus Series: ESG: Environmental and Investment Considerations for Insurers
Concerns about climate change, social justice, and equality have been increasing for years, but in 2021, these concerns are becoming mainstream in all areas of business, including insurance. This report is the third in a series that Conning will release in 2021, which will examine how the insurance industry is integrating ESG (Environmental, Social, and Governance) concerns into their operations and reporting.
Table of Contents:
Introduction
Why Now?
Measuring the Environmental Portion of ESG
- Environmental Concerns: The Most Easily Measured Part of ESG
- What Companies Should We Invest In?
- What Companies Should We Be Willing to Insure?
- Measuring Progress on Environmental Concerns
Investments: The Insurance Industry’s Largest Lever
- “Follow the Money”
- Measuring the Insurance Industry’s Clout
- How Are Insurers Using Their Influence?
- Transition Risk
- Regulators and Others Add Their Weight
What Companies Should Insurers Be Willing to Insure?
- The Pressure
- Insurers Are Responding
- There Is Still a Need for Coal
- A Different Approach
- Societal Costs of the Withdrawal of Insurance Support for Coal
The Path Forward
Introduction
This report is the third in a series that Conning will release in 2021, which will examine how the insurance industry is integrating ESG (Environmental, Social, and Governance) concerns into their operations and reporting. This third installment will provide an overview of ESG, current regulations and disclosures, and a summary of some of the current efforts to standardize ESG regulations and disclosures. The next report will, in turn, examine environmental, social, and governance concerns and what companies are doing to each of those areas. As part of each of the reports, we will include a more detailed analysis of individual companies and their efforts in that area based on their 2020 filings.
ESG issues, reporting and disclosure requirements, and regulations are changing quickly, and the changes are almost certain to keep accelerating. Insurance companies that do not stay out in front of the issues will quickly find themselves at a disadvantage.