General Insurance Article - Sustainability practices stocktake as insurers progress

With COP 28 taking centre stage, financial institutions confirm commitment to the role they have to play in shaping our sustainable future

 Mazars, the international audit, tax and advisory firm, announces the release of its new report, Sustainability practices stocktake: how banks and insurers have progressed – a data-led guide to where financial institutions stand today on their progress towards achieving more sustainable practices.

 With time running out to shift to a more responsible finance model, the new report identifies the areas for improvement, the sustainability progress made, and the change banks and insurers are prioritising in their operations.

 Phuong Gomard, Principal, Global Sustainable Finance Leader, Mazars says: “This year’s survey on sustainability practices was the most comprehensive and information-rich report to date. The results continue to inform the debate and provide a valuable benchmark for banks and insurers looking to progress in their journey to a more sustainable business model.”

 Using insights gained from more than 400 senior executives in banks and insurers across Europe, North America, Latin America, Asia-Pacific, Africa and the Middle East, and from Mazars’ experts, this report details where financial institutions stand today in their progression towards more sustainable practices and identifies the significant sustainability-related knowledge gaps that still exist in this sector.

 Key findings include:
 • Almost all banks and insurers (99%) have allocated responsibility for sustainability-related matters to members of their senior management.
 • Firms identify their most significant knowledge gaps are in socially-related sustainability issues such as employee and human rights matters (62%) and assessing climate risk drivers (60%).
 • Nearly half of respondents (46%) incorporate sustainability considerations when reassessing their business models.
 • Most respondents (90%) use external credit rating information on counterparties to evaluate climate-related and environmental, and energy-related risks.
 • Over half of institutions (53%) reveal sustainability-related information through disclosures that accompany sustainable and ESG financial products.

 Read the full report here

 Banks and insurers have made notable progress since the publication of our Responsible Banking Practices: Benchmark study 2021. Regulation, innovation and research doesn’t need to compromise sustainability considerations. As market demand and stakeholders' interest in sustainable finance solutions continue to rise, banks and insurers are taking a strategic approach to put themselves in a prime position to facilitate their clients’ sustainable objectives.

 Areas for improvement
 Despite environmental and societal matters such as climate change, employee well-being, and human rights increasingly being in the spotlight, this report finds that banks and insurers still struggle to fully comprehend how these factors might affect them and establish reliable metrics to set targets and maximise progress.

 Prioritising change
 Data and responsibility are essential for further change. Boards and senior management must also establish clarity and precision regarding the impacts to be measured.

 While some still view the industry as being in the early stages, there is no longer the luxury of time to achieve a shift toward nature-positive outcomes. Banks and insurers who implement sustainability strategies more holistically can be at the forefront of the shift to a truly responsible and more successful finance model. Now is the time to act.

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