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Regulatory compliance on ESG matters emerged as the number one issue of concern for risk professionals in the Airmic survey this year. But ESG regulations and reporting requirements such as the Task Force on Climate-related Financial Disclosures (TCFD) could equally present an opportunity for firms to sharpen their focus on issues that matter to their business.
Of our survey respondents, 43.8% believe that climate change will start to have a material impact on their business within one to two years. Yet, in terms of their organisation’s understanding of how the physical and transition risks of climate change will impact their business, a sizeable number of respondents have not taken quantification and management actions on climate, or have just taken initial actions on this.
Global challenges such as climate change call for ambitious initiatives. It is therefore admirable that the insurance industry has made commitments through various initiatives. However, more dialogue is needed between insurers, brokers, insurance buyers and risk professionals to ensure that these initiatives have the right intended consequences on the global economy and so that significant progress can be made towards net zero.