55% of insurers have reported in a study that they are seeing increased pressure to focus on ESG matters from stakeholders, according to law firm DWF.
The company’s survey of 480 senior executives in 13 countries is said to show that 28% of the insurance executives felt that the ESG performance of their own company was ‘weak’. Some 65% of insurance leaders also said that poor ESG performance is affecting their company a great deal, in comparison to an average of 59% of executives across all companies surveyed.
Kirsty Rogers, global head of ESG at DWF, said: “The clear message from our survey is that companies not only understand the need to have a strategy for ESG, but that without one there are clear long-term risks and liabilities. These costs could include damage done to their business to the point of affecting their licence to operate. Whilst there is a cost to transitioning to a more sustainable business, it is a necessary investment for people, the planet and ultimately profit.
She added: “It is clearer than ever that businesses have a huge role in driving the global transition, while also improving social issues and driving progress on governance, and insurance companies understand this. To achieve their goals, they need a clear, ambitious and transparent ESG strategy.”
On the legal front, only 30% of insurance sector executives told the survey that they have fully considered the ethical and legal implications relating to ESG disclosure and commitments, whereas across all sectors, the figure was slightly higher at 35%.
ESG has been a hot topic in the investment and insurance space over the last two years. Just this month, Steel City Re said that companies implementing ESG and reputational risk strategies have seen almost-immediate effects on their stock price.
Its report says that those implementing these strategies saw their stock prices go 5% above market value within two weeks, with the premium almost doubled for those that publicly shared and validated those strategies.
Other firms that have been getting onto the ESG bandwagon in recent weeks have been BMS, which has created a new role of group of head of ESG, along with Chaucer and Moody’s who are collaborating on an ESG scorecard.
Meanwhile, WTW found that 77% of senior executives lack confidence in the approach their firms take to ESG.