The Guernsey International Insurance Association (GIIA) has established an industry-first environmental, social and governance (ESG) framework for insurers.
This follows the United Nations’ recommendations to incorporate ESG processes and sustainable development goals with financial products, services and investments made by the insurer. GIIA enrolled in the UN’s Principles for Sustainable Insurance initiative in June 2020.
The structure is designed to aid GIIA’s member organisations in managing their ESG opportunities and producing a positive ESG impact through self-certification.
To ensure full compliance, the framework lists three requirements: embedding of ESG within decision making and governance structures; contribution of underwriting risks and investments to achieve sustainable development goals; and public disclosure of the insurer on how it has met the requirements.
There are also developments towards implementing a third-party accreditation process.
Mark Elliott, GIIA chairman, comments: “This framework 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, adds: “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 reinsurers, managers and prospects.”
“The framework is both a handrail for existing reinsurers taking their first steps into ESG and a standard that sophisticated ESG practitioners can certify compliance with to demonstrate their credentials,” she explains.
Dr Andy Sloan, deputy chief executive of strategy at Guernsey Finance, adds: “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.”
The framework follows another two industry-firsts for the Guernsey insurance sector, having recently provided an insurance-linked securities structure for Replexus’ catastrophe bond covering pure volcanic eruption.
Guernsey was also the domicile of choice for Paratus Group’s first parametric fuel price insurer to facilitate carbon neutral growth, create price certainty and allow policyholders to monitor volatility.
