The need for insight & intelligence on sustainability risks

ESG and sustainability considerations are becoming increasingly important for corporates, covering everything from greenhouse gas emissions, greenwashing, impact on biodiversity, through DEI, modern slavery and human rights, to corporate governance, independent oversight and reporting.

Corporates face a growing array of new regulations and rules, with compliance high on the agenda and strict penalties for failure to engage and comply. Litigation is on the increase in relation to ESG factors, from all sides, including shareholders and investors, activists, customers and employees. And beyond all this, there is the reputational impact of ESG.

In this context, risk and insurance managers will be expected to play an important role in their businesses. Boards are asking what the risks are, how they are being managed and mitigated, and how risk managers can contribute to the organisation’s ESG strategy.

At the same time, ESG considerations are beginning to impact the insurance market in terms of pricing and terms and conditions for some corporates, as well as insurance coverage. Brokers and others are developing ESG risk-rating tools to help organisations obtain better terms and conditions and coverage from insurers. And while ESG is only slowly being integrated into underwriting by insurers, that will only increase in the future.

ESG derived from the investment community as a concept but is now being rolled out into a much broader role – in effect it is about sustainability. And there are two sides to this, the so-called double materiality. This is the impact of ESG and sustainability on a business, and the business’ activities effect on the environment and society.

Companies, boards and risk managers are all having to get to grips with ESG and sustainability, and there is some confusion, lack of awareness or inability to access information on these issues.

But what is clear is that there is an increasing opportunity for risk managers to get involved. There are instances of risk managers taking on greater responsibility for ESG and sustainability, and in others, being asked to work with sustainability managers.

In response to these challenges and opportunities for risk and insurance managers, Commercial Risk and Global Risk Manager are to launch a dedicated information service covering ESG risk issues.

ESG Risk Review addresses the increasing need to understand the regulatory demands associated with ESG, the impact on the corporate risk profile, and how these risks can be managed more effectively. It will also consider the increasing demands and disclosures placed upon insurance buyers by carriers, leading to an ever-more complex risk transfer process.

ESG Risk Review is aimed primarily at large organisations in Europe. It will be supported by Zurich as our headline partner and will offer free-to-access content for all risk and insurance managers and related ESG officials within corporates. The focus will be on Europe, while also reporting on developments in the US and globally.

ESG Risk Review will comprise a dedicated ESG channel on the Commercial Risk website (www.commercialriskonline.com), monthly digital newsletter, breaking news, and a quarterly webinar series. The new service will be edited by Tony Dowding, editor of Global Risk Manager ([email protected]). The service launches on 17 May 2023.

To sign up for the monthly newsletter, please visit: https://www.commercialriskonline.com/esg-launch/