Global insurance and reinsurance broker Marsh has revealed a new directors and officers liability (D&O) insurance initiative that will recognize U.S. clients with superior environmental, social, and governance (ESG) frameworks.
Marsh’s clients will work with international law firms including Norton Rose Fulbright and Orrick, Herrington & Sutcliffe LLP to independently review, evaluate, and bolster their ESG frameworks.
The broker explains that subject to underwriting, clients will then be considered for preferred D&O policy terms and conditions on ESG-related exposures from four participating D&O carriers: AIG; Berkshire Hathaway Specialty Insurance; Sompo International; and Zurich North America.
So, under the new framework, companies are able to receive preferred D&O coverage on ESG-related exposures, such as climate change disclosures and representations.
Maureen Gorman, a Managing Director in Marsh’s US FINPRO Practice, commented: “Our clients have endured one of the most challenging D&O markets in decades, and the risk landscape is only intensifying, especially as it relates to ESG issues like climate change and diversity.
“As clients continue to invest in ESG initiatives, it is right that they be recognized as a better risk by underwriters. By working with these select law firms, we are ensuring clients have access to leading independent ESG expertise that can help validate and elevate their ESG efforts, becoming eligible for more favorable coverage.”
The new initiative comes amid an uptick in ESG-related stakeholder activism and litigation, alongside an evolving global regulatory environment. Marsh notes that it also shows how investing in robust ESG initiatives can positively impact companies’ bottom lines.
Amy Barnes, Head of Climate & Sustainability Strategy at Marsh, said: “Marsh is proud to introduce D&O coverage enhancements that recognize organizations taking a proactive approach to managing the risks associated with ESG, including the transition to a low-carbon economy.
“We look forward to replicating this initiative in London and in other parts of the world over the coming months. Marsh McLennan has co-led the product and services development workstream of the Prince of Wales’ Sustainable Markets Initiative Insurance Task Force, and we are pleased to be driving climate positive innovation in our industry.”