Spanish risk managers add ESG to their remit

Risk managers are becoming increasingly involved with the adoption of ESG principles by their companies, and insurers are taking it seriously, most of the time, according to leading Spanish risk professionals. The growing involvement of Spanish risk managers in the emerging world of ESG is only going to accelerate as they increasingly have to make the case about the sustainable credentials of their companies to the insurance market, the risk managers said. “We have seen of late how the insurance and reinsurance markets are creating ESG-related rewards,” said Ramón de la Vega, risk financing director at telecommunications group Telefónica. “They are ‘rewarding’ companies that have an important commitment to ESG with more capacity for a programme, with a discount on the rates or a longer LTA that would not have been offered otherwise. We are already seeing this process and we are already benefitting from it,” he explained. “For example, our captive is rated, and the last time we were supporting our rating, the analysts asked us about our ESG policy,” he added. “We have recently done roadshows to renew two large programmes, and one of the points that was relevant to underwriters was the presentation of the group’s ESG policy and the ESG ratings provided by external agencies.” As a result, the risk management department needs to work closely with other parts of the company that are in charge of implementing ESG policy. “The risk and insurance management department works closely and provides support to the sustainability department, as there are parts of ESG that are linked to what we do,” De la Vega said. The case of Telefónica is, in fact, not unique. “In our company, ESG principles are integrated into our strategic plan. They are values applied across the group. We believe in them and so do our investors, and stakeholders and underwriters are starting to ask about it too,” said David González, director of risk and insurance at construction and concessions group Sacyr. “Although the ESG policy is not an area that is under my responsibility, I play an active role in it. Improving and optimising sustainability is a corporate goal,” remarked Lourdes Freiria, general director of risk and insurance at Group San José. “From an insurance point of view, we have had to certify our strategies and policies to renew some corporate programmes such as D&O.” Daniel San Millan, the president of risk management association Igrea, said: “I believe companies are finally keen on investing on modelling the impact of climate change on our assets.” But San Millán, who is also the risk manager at Ferrovial, said that the insurance market needs to do more than asking about the ESG credentials of their clients. “There are several insurance companies that have their mouths full of green talk but when we go to them with a renewable energy risk, or try to buy cover for a waste recycling plant, they treat us very poorly,” he said. “I see a certain lack of commitment from the market with some risks that are actually focused on creating a greener world.”

Spanish risk managers add ESG to their remit

ESG becomes part of renewal process but insurers challenged to rise to new ‘green’ risks

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