Sustainability officer roles are not a new addition to the board for many of the larger insurers, but for smaller businesses, that are only now starting to recruit head of ESG, these roles tend to be less complex than for larger businesses.
Greg Lowe, Director in the sustainable finance team at Deloitte, explains: “Where larger insurers are concerned, there are now often regional leads given the complexity and scope of the topic. For regional leads or sustainability leads at smaller insurers, the roles are typically less technically complex. Many of those are recruited from operational sustainability roles, with a focus on energy efficiency and reporting. Beyond the roles within a sustainability function, for corporate and speciality insurers in particular, many risk functions are appointing roles specific to climate. Climate isn’t always the full-time focus of the role, but it’s becoming more commonplace for it to be a full-time role”.
AXA XL, for example, has a sustainability team in place for “about 10 years” according to CEO for UK and Lloyd’s at the firm Sean McGovern. McGovern explains: “We are really focused on how we – as a business – try to ensure that we act responsibly and are sensitive to the ESG considerations. This is not a new journey for us, but our thinking has evolved and matured as time has gone by”.
He adds that at AXA XL sustainability is a “core premise” of the business, and says: “We have a global sustainability team that drives our sustainability agenda. From an ESG point of view, and within the UK, we have a small ESG team, which is really there to pull it all together at country level, but is also particularly focused around how we bring value to our clients in helping them with their own ESG practice”.
Some larger brokers also split their ESG and sustainability roles. Richard Dudley, Global Head of Climate Stategy at Aon, looks specifically at climate change and at how the industry should be supporting decarbonisation and increasing resilience to the existing effects of climate change, as well as how to develop new products and services.
Leslie Follmer, Head of Investor Relations and ESG at Aon, is globally responsible for how Aon “spends its money, for example, the cost of how we run our operations, the carbon footprint of our real estate, the travel and the entertainment policy we have for all our employees around the world, and how we manage our supply chain”, but also has an eye on ESG on commercial side and is “responsible for looking at ESG more broadly”, according to Dudley. Dudley explains: “It sounds a bit of a mish-mash, but it actually works quite well in a large organisation because there are so many aspects of this”.
For the rest of the industry Roger Jackson, UK Partner and Insurance ESG leader at KPMG, says he has not seen many firms “where they’ve got a sustainability head and chief ESG officer”. He explains that those that focus more on sustainability tend to have head of sustainability roles and those more focused on S and G aspects of ESG have chief ESG officers, adding that head of sustainability often is there to signal to stakeholders “that sustainability is a big issue for them”.
For example, LV, Marsh and Zurich only have heads of sustainability, Allianz has a Chief Sustainability Officer and Ageas has a Head of ESG. Other companies, including Aviva, Gallagher or Markerstudy for example, do not have a dedicated ESG/sustainability officer and instead have people whose roles include responsibility for company’s sustainability agenda.