Issues & Answers Special Advertising Section:
“At Munich Re, we're taking a leadership role regarding climate change by making voluntary commitments that go way beyond what's required by the Paris climate agreement, the UN Global Compact, and others.”
There have been some societal and generational shifts that are resulting in a public who is just simply more aware of and engaged in the environmental and social impacts of the business and how that relates to the communities around them. Governance topics are at the top of mind because of some harmful impacts that improper oversight has had on communities and investors. In a nutshell, there’s just more awareness that businesses are an integral part of our communities, and with good management and governance practices, they can promote a healthier environment and more economic opportunities for everybody. There’s also clear evidence that companies with favorable ESG practices outperform their less sustainable and less diverse peers.What ESG topics do you see as having the greatest impact for the industry?
The insurance industry being highly regulated has been on the forefront of governance topics. In general, enterprise risk management is strong. The social aspect of ESG definitely will have the largest impact on the insurance industry. The insurance industry can have the biggest impact on the environmental aspect of ESG. Thinking about the social for a moment, clearly, the insurance industry is lacking in diversity, especially at senior management and board levels. In discussions with industry executives, this is an area of focus. The No. 1 reason is the insurance labor force is extremely tight right now. It makes sense for us to cast a wider employment net.
What are some core business opportunities related to ESG?
We’re working on developing some public-private partnerships at the community level. It’s really at the local government and community level where many of these resiliency projects are housed. We’re trying to partner together with these local governments to drive resilience and sustainability initiatives where those initiatives are needed most. They’re closest to the people who are impacted by natural disasters, rising sea levels and other impacts of climate change.
In what ways has Munich Re expanded on its ESG commitment?
As part of our business, Munich Re has been studying the intersection of changing climate and natural disasters since the early ’70s. We definitely see that a warming climate increases the risk for severe hurricanes, wildfires, flooding, and likely, it also increases the frequency of severe convective and winter storms. Climate change is definitely having an impact on our industry. We in the insurance industry have a great opportunity to influence positive change. We also share our know-how. We share our data on our Risk Intelligence Platform. We’ve shared with our clients the steps that we’ve taken in our own buildings. We have added solar panels, and we’ve transformed our buildings into LEED-certified buildings.