Steel City Re Announces New ESG Insurance
“Under pressure to commit publicly to measurable goals in the areas of environmental stewardship, social justice, and dutiful governance (ESG), some companies are setting those goals without the operational or governance processes in place to make them a reality,” the business explained.
“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.”
The cover, which combines parametric reputation insurance and risk management advisory services, provides 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” around ESG issues.
The company, which has around 200 captive clients, measures reputational risk through its RVM Index. This draws on 7 million measures of reputational value across 7800 companies, captured weekly for 20 years. Its parametric policies pay out 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.
Steel City Re CEO Nir Kossovsky said: “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.
“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.”