Guernsey Creates ESG Framework for Insurers, Insurance Managers
May 13, 2021
Guernsey has created an environment, social, and governance (ESG) framework for insurers. The framework was designed by the Guernsey International Insurance Association (GIIA) with the aim of helping member organizations manage ESG opportunities and risks.
"ESG-related criteria has moved from a peripheral concern to one that is front and center of decision making," GIIA Chairman Mark Elliott said in a statement.
"This framework acknowledges that we are a long way from agreement on a single standard for ESG in the insurance space, so it is an important first step on the journey towards recognizing the work that Guernsey insurance entities do in achieving Sustainable Development Goals and ensuring that ESG is at the heart of their governance structures," Mr. Elliott said.
The framework enables insurers and insurance managers who are members of the GIIA to self-certify. Work is underway to create a kitemark—a UK product and service quality trademark—through a third-party accreditation process.
The framework 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.
The framework includes four pillars, which must be fulfilled for compliance.
- To embed ESG within the decision-making and governance structure
- The risks underwritten to contribute to achieving the sustainable development goals
- The investments held to contribute to achieving sustainable development goals
- The insurer to publicly disclose how it has met the framework's requirements
"What the framework seeks to achieve is behavioral 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," Adele Gale, deputy chair of the GIIA, said in the statement. "The framework is 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."
Dr. Andy Sloan, deputy chief executive, strategy, Guernsey Finance, welcomed the framework. "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," he said in the statement.
May 13, 2021