More than a quarter of insurance executives worldwide feel that their company has a poor environmental, social and governance (ESG) record, a survey by law firm DWF has found.
After polling 480 senior executives in 13 countries, the researchers found that 28% of the insurance leaders surveyed felt that the ESG performance of their own company was “weak”.
The findings also show that 65% believe that the poor ESG performance is affecting their company a “great deal”, compared to an average of 59% across all the sectors surveyed.
This is despite 55% of insurers saying that they had experienced increased pressure on ESG matters from stakeholders such as regulators, customers and employees over the last two years, compared to 46% across all sectors.
“There is increasing pressure on insurance companies to meet market expectations and subsequently stakeholders are often requesting ESG information from their suppliers”, said Claire Bowler, head of the insurance sector at DWF.
“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."
Only 30% of the insurance sector executives surveyed said that they have fully considered the ethical and legal implications relating to ESG disclosure and commitments, whereas across all sectors, the figure was slightly higher at 35%.
This comes after insurers were recently warned to prepare for a plethora of biodiversity-related standards and regulations over the next two years, which is set to become the next big ESG challenge for global businesses.
“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,” said Kirsty Rogers, global head of ESG at DWF.
“These costs could include damage done to their business to the point of affecting their licence to operate. Whilst 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.”
Image credit: iStock
Author: Chris Seekings