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Investors are demanding ever more comprehensive disclosures on the impact of climate-related matters. They’re expecting a company’s financial statements, management discussion and analysis (MD&A) and sustainability-related disclosures all to provide a coherent, connected and integrated picture of the risks and opportunities facing the business.
Our 2023 climate-related disclosure benchmarking analysis covers 47 major insurers. It focuses on 5 key areas: financial reporting, financed and insurance-associated emissions, transition plans, nature-related disclosures and assurance.
These areas have been selected as they are current or emerging areas of focus in sustainability reporting for insurers.
Progress continues but the opportunity for insurers to tell a more connected story remains. Driven by the demands for climate-related information, insurers are embracing transparency and increasing their disclosures. They are now on a journey to join the dots and create a narrative that is more meaningful and clear for their users.
Connected reporting
Financial reporting
Mentions of climate in insurers' financial statements are primarily limited to the basis of preparation or risk management sections. Continuing to improve connectivity through the full reporting suite, including the financial statements, is key.
Financed and insurance-associated emissions
Calculating financed and insurance-associated emissions is far from easy and presents an ongoing challenge for insurers, particularly in jurisdictions with less advanced climate-related disclosure regulations.
Transition plans
Many insurers have committed to becoming net zero by 2050. Now they need to continue developing and articulating their transition plans with detailed implementation strategies, including clear action plans. This would allow users to better assess insurers’ feasibility, progress and effort associated with reaching net zero.
Nature-related disclosures
There is an increasing focus on nature and its connection with climate-related risks, but there is a lot more to be done in terms of developing strategies and plans. Most insurers acknowledge this as an emerging area which they are currently working through.
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