Sustainability considerations are having a major impact on the (marine) insurance industry and are “here to stay”. In light of the growing importance placed by many IUMI members on environment, social and governance (ESG) issues, the Executive Committee in their May meeting approved the establishment of an ESG Working Group (WG). The WG’s role is to introduce the topic into IUMI’s thinking, to offer guidance to members whose expertise in this area is at an early stage, and to develop a long-term vision for IUMI’s ESG approach.
The WG will further identify sustainability topics of high relevance to marine insurers. Educating members and raising awareness for these issues will be a key objective. To ensure consistency of IUMI’s activities in the ESG space, close cooperation with the Policy Forum will be warranted. A first step in this regard is the addition of several ESG topics with a direct impact on marine insurers to the Policy Agenda (section 4).
With climate change being one of the most pressing issues of our time, significant focus will be put on environmental issues. In the long run topics with an emphasis on the “S” and “G” will also be addressed, not least because many sustainability concerns involve social and governance as well as environmental aspects. Ship recycling is a tangible example where shipyards which do not offer acceptable working conditions have social, governance and environmental implications.
Going forward more questions are likely to arise for the ESG WG, not least related to the assets insurers are willing to protect. The decision taken by various large insurance companies to scale back their exposure to coal, oil and gas projects is an indication of a changing appetite to insure certain industries. This new understanding is likely to trickle down to marine insurers who may only be marginally involved within such businesses. A long-term view taking this evolution into account will be necessary for IUMI’s ESG WG to successfully develop a strategy to address these challenges.