Steel City Re, a provider of parametric insurance solutions for reputation risk, has announced the launch of a new environmental, social and governance (ESG) product designed to protect Boards of Directors.
Shareholder and public pressure has propelled ESG issues to the forefront of companies’ minds in recent years, but Steel City Re notes that many are setting goals without the operational or governance processes in place to make them a reality.
Recent litigation has made it clear that both investors and regulators have the right to consider these ESG statements as material and boards are being targeted in courts of law as well as courts of public opinion.
This new solution from Steel City Re is therefore designed to offer payments for a wide range of costs a firm may incur on behalf of the board or individual directors in pursuit of reputation resilience and restoration in the context of ESG issues.
A synthetic index of reputational value called the RVM Index is the parameter underpinning Steel City Re’s insurance solutions.
Relying on a seven-million-event experience base, Steel City Re calculates the value of the one or more parametric triggers best matching the clients’ choices.
Both parametric policies pay when the insured’s RVM Index value dips below a trigger value for 20-weeks following a publicly recognized adverse ESG event, or more broadly, an event in the areas of ethics, innovation, safety, security, sustainability, or quality.
“The race to set ever higher ESG goals has made accomplishing those goals more challenging and the risk of failure – often very public failure – more serious,” said Steel City Re CEO Nir Kossovsky.
“In many cases, ESG has become central to companies’ reputations and the adequacy of board oversight will put board members in the crosshairs when regulatory, investor, rating agency and media scrutiny are brought to bear.”