The growing importance attached to questions related to sustainability has impacted most industries. Marine insurance is no exception and with a number of IUMI members raising this issue, not least to the agenda of the annual conference in Toronto this year, IUMI decided to submit feedback to the consultation on the first environmental, social and governance (ESG) risks guide for the insurance industry. The document was drafted by UN Environment’s Principles for Sustainable Insurance Initiative in cooperation with various insurers. It is primarily intended for insurance companies with non-life insurance business, particularly industrial and commercial insurance business. The guide is aimed at industry participants who intend to develop their approach to integrating ESG risk considerations into their core insurance business processes and decision-making. The document includes a section of so-called “heat maps” which are meant as a guidance tool to get an indication of levels of potential ESG risks across economic sectors.
IUMI’s submission to the consultation sought to emphasise the importance of raising awareness for ESG risks. The guide is a useful tool to do that. At the same time, it was suggested that the document ought to take into account the situation of small and medium-sized insurers and smaller, less advanced insurance markets. For this group, the scheme as laid out in the guide is likely to be too abstract and too specific. Moreover, resources are often limited and no dedicated staff could work on the integration of ESG risk assessment processes. For this reason it is desirable to develop a more basic version of the guide which aims to provide tangible and concrete advice for smaller insurers on how to integrate sustainability and ESG issues into their business operations.
Overall, the feedback on the guide was positive with some proposals for improved (i.e. simpler) language and several proposals to certain sections in the heat maps. The primary objective of the guide should be to promote the notion of taking into consideration ESG issues in the underwriting and business process. IUMI is happy to support with the promotion of the guide, for instance by hosting a webinar with UNEP PSI to raise awareness and spread the word.