If bids farewell to customers with a poor ESG rating
Following If’s introduction of ESG screening for business customers last year, several companies have improved their practice to comply with the sustainability requirements in the UN Global Compact’s principles. If is also bidding farewell to customers that do not adhere to the principles for good sustainable conduct.
Since the end of 2021, close to 700 business customers in the Nordic region's largest insurance company have been screened for compliance with the global sustainability requirements of the UN Global Compact programme.
– Approximately 3% of the screened customers still need to meet this challenge. By far the majority perform really well. We’re in dialogue with the few companies that have problems, says Kristine Birk Wagner, Head of Underwriting at If Industrial.
If launched this initiative in autumn 2021 for both new and existing business customers. If's aim is to take responsibility for influencing its customers to operate more sustainably and to adjust their conduct if the screening shows this to be necessary. Based on the screening result, If can also point out the areas in which a company needs to improve its operations or conduct.
Improvements and some goodbyes
Kristine Birk Wagner explains that the initiative has given more resonance in the market than If had expected.
- We’ve seen great support for this initiative, both at sector level and in our dialogue with customers. Our customers fully accept that requirements are made, and most of them react positively, she says.
Since the start in autumn 2021, 677 corporate clients were assessed and subsequently received an ESG rating. A total of, 19 cases were sent for referral and were assessed by the ESG assessment team. Five clients improved their rating and are therefore no longer referral cases. One company has received conditional approval, whilst two clients will be declined insurance at the next renewal, unless their ESG rating has improved.
The required effect
Concerning the background to the initiative, If's Group CEO Morten Thorsrud explains:
– We believe that we’re all part of the solution the world needs. We use our position and our competences to support our customers, and if necessary, we’re happy to help by nudging them towards a more sustainable strategy and operations, he says.
– We take our participation in the UN Global Compact seriously and work actively to implement human rights, labour rights, environmental protection and anti-corruption in all our business activities.
Overall, If is very pleased with the result, and particularly the development and attitude among the customers on the observation list.
This is actually precisely what we want to achieve by implementing the initiative.