Guernsey has created an environment, social and governance (ESG) framework for insurers.
The framework, believed to be the first of its kind, was designed by the Guernsey International Insurance Association (GIIA) to help members manage ESG risk and to deliver positive ESG impact. It enables insurers and insurance managers who are members of GIIA to self-certify, with work already underway to create a kitemark through a third-party accreditation process.
The framework sets out four pillars which must be fulfilled to comply with the framework. ESG must be embedded within the decision making and governance structure; the risks underwritten must contribute to achieving the sustainable development goals; the investments held must contribute to achieving sustainable development goals; and insurers must publicly disclose how they have met the framework’s requirements.
Mark Elliott, chairman of the GIIA, said ESG has become a significant concern for businesses that is front and centre in their decision making. “This framework acknowledges that we are a long way from agreement on a single standard for ESG in the insurance space,” he said. “It is an important first step on the journey towards recognising the work that Guernsey insurance entities do in achieving sustainable development goals and ensuring that ESG is at the heart of their governance structures.”
Adele Gale, deputy chair of GIIA, said: “What the framework seeks to achieve is behavioural change. There is a strong desire within the industry to bring ESG discussions into the boardroom and our aspiration in creating this framework is to make those discussions accessible to all our Guernsey based re/insurers, managers and prospects.”
She described the framework as “both a handrail for existing re/insurers taking their first steps into ESG and a standard that sophisticated ESG practitioners can certify compliance with to demonstrate their credentials.”
Andy Sloan, deputy chief executive for strategy at Guernsey Finance, said: “This is a great development and demonstrates not only leadership from Guernsey’s insurance industry, but also a commitment to sustainability that runs across the board in Guernsey’s financial services sector.”
Guernsey’s move follows the United Nations’ recommended approach of incorporating ESG processes to align sustainable development goals with the outcomes of financial services products, services and investments made by the insurer.
Guernsey International Insurance Association, Guernsey Finance, Mark Elliott, Adele Gale, Andy Sloan, ESG