Written by: Griffiths & Armour on: 06 Jul 2023
What does ESG cover and what should it be in your insurance policy?
Environmental concerns and social issues and are now considered to be some of the most significant global risks we face, this at a time when the propriety of organisations has never been under more scrutiny. In response to this landscape Environmental, Social and Governance (ESG) factors are increasingly being assessed to determine how organisations are managing these areas, such as their ethical behaviour and impact upon the world and its population. ESG builds upon the positive values and objectives established by Corporate Social Responsibility (CSR) initiatives by incorporating much needed tangible measurement.
Key ESG areas
ESG Policy
An organisation’s culture flows from its leadership. As such, for ESG management to be effective it must be fully embraced and endorsed by senior management. A high-level policy statement on ESG formally signed off by the most senior individual can assist in defining the values of the organisation, and serve as a signpost for future decision making and organisational practices. Such statements can include:
- The organisation’s broad aims and objectives on ESG.
- An overview of how the organisation’s activities impact ESG.
- Recognition of the benefits of strong ESG performance.
- A commitment to providing suitable resources and expertise to deliver on the aims and objectives.
- The responsibility of all staff to contribute to help achieve the aims and objectives.
- Confirmation that regulatory compliance is considered the minimum standard.
- The desire for continual improvement.
- Support and/or alignment to a recognised standard.
The policy can also briefly touch upon the key elements of how the organisation will manage ESG, for example in relation to:
- Assessment
- Training
- Measurement and targets
- Monitoring
- Reporting
- Auditing
- Review
The use of supporting policies and documentation will provide additional detail on how and when these will be implemented. Responsibilities for ESG should also be defined at all levels throughout the organisation from the leadership to general employees.
The above guidance represents an extract from Griffiths & Armour’s latest ESG guidance document. The full document together with template ESG metrics and an e-learning training module are available via RMworks, which is provided to all Griffiths & Armour clients. Further information on RMworks is available here.
If you have any questions about the contents of this article, please click below to submit your enquiry to Risk Management Managing Director, Greg Street, who will be happy to assist.
