QBE has developed a tool to provide a risk management framework for customers to better assess environmental, social and governance (ESG) risk.
The tool provides a template sustainability policy and ESG framework to help smaller and medium sized enterprises identify, monitor and manage a range of ESG issues that may impact on their business.
QBE has recognised that while many larger businesses will have been putting framework into place due to increasing disclosure requirements, smaller and medium sized businesses may not have put these into place and are often more limited in terms of budgets and resources for sustainability projects.
Events such as large-scale pollution, recalls on dangerous products, employee safety, unethical behaviour, poor management, and financial collapses, can all impact on customer loyalty, profitability, the ability to operate.
These types of incidents often draw prolonged media attention, promote shareholder activism, and public policy debate that can make things worse and cause extreme reputational damage
According to recent research from QBE, small-to-medium sized businesses were less likely to say ESG was currently a top priority for their business than larger businesses (54%), but over a third of small businesses (34%) and nearly half of medium-sized businesses (46%) said they were currently worried about potential liability from failing to deliver on environmental initiatives or report climate related exposures.
Deborah O’Riordan, Practice Leader, Risk Solutions, QBE Europe, said: “There is increasing regulation and numerous policy interventions on sustainability issues, as well as growing numbers of international standards, best practice frameworks and voluntary initiatives in specific regions and sectors.
“In this context, it is more important than ever that organisations develop a structured approach to considering and managing sustainability.
“While the sustainability movement is advancing in big business due to disclosure requirements, it could be slow to trickle down to the smaller and medium enterprises that make up a large part of QBE’s customer base.”
