Guernsey develops ESG kitemark for ILS

Guernsey’s insurance industry is developing a green kitemark for its insurance-linked securities (ILS) platforms, to promote environmental, social and governance (ESG) issues.

Adele Gale, head of ILS at Robus Group in Guernsey, told a We Are Guernsey-hosted ILS Insight webinar about the plan. ILS platforms will be able to apply for the kitemark, she said, which will serve as an independently-verifiable badge to demonstrate its ESG credentials.

A poll during the webinar showed that more than 95 percent of delegates agreed that ILS has the potential to have ESG credentials.

“Guernsey’s insurance industry recognises its place in the ILS value chain,” Gale said. “ILS has the potential and is predisposed as an asset class to be chosen by investors looking to meet their own ESG agendas. Guernsey is aiming to be as proactive as possible in facilitating this. It is about independent verification and ensuring there is validity and that we are living and breathing ESG.”

Bedell Cristin partner Richard Sharp said COVID-19 will not have diminished the need to promote ESG. “One feature of the challenges the pandemic threw up was everyone assessing their footprint, their work practices, how their industry operates,” he said. “It was a timely focus on those issues at the time of the introduction of Guernsey’s green initiative. It has focused people’s minds on these issues and brought them to the fore.”

Jutta Kath, head of transaction management at Schroder Secquaero, said the ILS market already supports certain activities in the field. She distinguished between the internal and external views of ESG.

“There is the external view in terms of what we offer to our investors seeking these kinds of products, but there is also an internal view to make sure that the products we offer are not greenwashed for the sake of being in the field,” she explained.

The Guernsey International Insurance Association had already signed up as a supporting institute of the United Nations’ Principles for Sustainable Insurance Initiative.