Analytics service to help UK insurers better assess ESG risk

A new service from credit information provider CRIF will enable UK insurers to assess the ESG profile of their UK and EU-based suppliers, partners and customer portfolio.

The new data repository and scoring service ESG Analytics draws on more than 130 key indicators derived from UK and EU information sources, analysing information on important areas such as a business’s water usage, waste production, emission, health and safety record, modern slavery and inclusiveness.

According to CRIF, to access these credentials, insurers only require the VAT or registration number of a UK or European business to get an ESG score along with the granular environmental, social and governance indicators, without the need to engage the individual company itself.

“The service enables businesses to take effective and immediate action on a range of ESG issues – for example, to ensure they are promoting sustainability by measuring their greenhouse gas emissions and assessing transition, physical and environmental risks ahead of prospective new regulation,” said CRIF.

CRIF said the benefits the solution brings to UK insurers include “enhancing pricing competitiveness by exploiting a proven strong correlation between ESG key indicators and loss ratios, improving profitability and competition, and helping insurers to prioritise their relationships with the most sustainable companies”.

Other benefits include safeguarding against future risks by identifying potential events that could harm the company’s ESG priorities and ambitions, and calculating Scope 3 emissions to boost transparency for stakeholders, better manage transition risks, develop climate-friendly products and support their own sustainability goals, said CRIF.

Sara Costantini, CRIF’s regional director for the UK & Ireland, said: “There’s no doubt that protecting the environment for future generations is the number one most pressing challenge for individuals, businesses and governments today. Financial institutions will play a crucial role in the transition to a green economy. For insurers in particular, efforts to reduce their impact on the environment and promote good governance and social responsibility are going to be more and more important in the near future.”

She added: “Considering the growing attention of the regulatory bodies towards ESG compliance in the EU but also in the UK, ESG Analytics enables banks, insurers and corporates to understand the impact of businesses they work with today and help inform their decision-making in this ever-more important area of work. And by working with regulatory bodies all around the world, we ensure we remain at the forefront of regulation so we can pass this knowledge onto UK financial institutions.”