The World’s Largest Insurers Have ESG Blind Spots, According to ShareAction

ShareAction, an organization that promotes responsible investment, carried out a classification of the 65 largest insurers in the world according to the climate and social responsibility strategies they implement. The evaluation of these companies showed that most of them have ESG blind spots, since they do not have the necessary restrictions for clients who are not sustainable.

This study puts the spotlight on companies that provide life, property, accident and health insurance services to show the enormous area of ​​opportunity that this type of organizations must address in order to improve their performance in terms of environmental care, a common challenge for humanity that requires the efforts of everyone, not only individuals, but, mainly, industries. Find out what the sector’s deficiencies are.

Insurers have ESG blind spots

The assessment managed by ShareAction to measure the ESG parameters of the world’s largest insurers analyzed the companies’ organizational governance structure, as well as the ESG commitments they have to their clients. In addition, ShareAction reviewed whether companies had a comprehensive plan to measure their environmental, social and natural impacts with their current and potential customers and what the service exclusions were.

The assessment consisted of thirty metrics, and half of the companies earned overall grades of E or F, the lowest grades achievable. The lowest scores were those of Lloyd’s of London, Sony Financial Group and Nationwide Mutual Insurance Co.

ShareAction stated that insurer results were really weak across the board, making it clear that this sector has a number of operational changes to make to align with climate goals.

Regarding the insurers’ results, Claudia Gray, head of financial sector research at ShareAction, stated that the ratings reveal the “abject failure of the insurance sector to meet its responsibilities to protect both people and the planet.” » and called for urgent measures to be implemented.

The failures of the insurance sector according to ShareAction

In addition to showing that insurers are not collaborating efficiently in caring for the environment through their operations, the study also allowed us to conclude that:

There are blind spots in ESG: although most insurers have signed commitments that consider net zero as an investment requirement, the activities carried out are not consistent with this goal and eight out of 10 companies do not have climate objectives for 2030. Nor do they have They have eliminated investments in thermal coal, gas and oil.

Lack of preparation for the climate transition: The analysis indicates that less than a third of insurers published a climate transition plan and most insurers have forgotten to promote their alliance with companies that carry out low-carbon activities.

Climate transition planning required: Insurers are required to publish climate transition plans aligned with net zero, based on climate science and capable of detecting greenwashing.
Regulatory interventions are required: if the insurance sector does not take action regarding its activities, it will be necessary to create and apply measures to regulate this industry.

CSR as a parameter of association

The evaluation of the 65 insurance companies carried out by ShareAction confirms the need for constant evaluation of the sustainable performance of companies in any industry, as this will allow us to detect failures, inconsistencies and opportunities for improvement in compliance with sustainability agreements and measure adherence to ESG criteria.

ShareAction reminds us that, if we want a greener world, it is necessary that every type of association includes a prior evaluation of the activities of the company, client, supplier or service provider to which we are considering joining, since only when sustainable actions of a company are an unavoidable requirement to invest, buy, hire or provide a service, we will achieve a change at the height of the current climate crisis.

On the other hand, the role of the regulation of activities in all industries is crucial in the advancement of sustainable objectives, since not only must companies commit to ensuring that their operations do not harm the environment, but there must be entities dedicated to sanction and align organizations that are not taking seriously the urgency of a green economy.

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(Featured image by kalhh via Pixabay)

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