The Year of a New Beginning – From ESG Commitments to Action

Joan Lamm Tennant, IIS innovation expert, explores how ESG strategic frameworks are driving businesses forward and creating widespread change and long-term value.

This article was written by Joan Lamm Tennant for the International Insurance Society, a sister organization of Insurance Thought Leadership, under the umbrella of The Institutes. To see more IIS articles by Joan and other IIS experts, visit

As the world grappled with the overwhelming challenges attributed to COVID-19, racial and social injustice and dysfunctional geopolitics throughout 2020, many observers anticipated that reliance on the ESG framework for establishing commitments to all stakeholders would fade. To the contrary, 2020 ushered in a year whereby the ESG framework provided a strategic and cultural road map for global corporations to adapt, navigate and emerge from 2020 with their businesses not only functioning but thriving. No longer are leaders debating the merits of ESG as a framework for creating long-term value for all stakeholders. Rather, a sustainability plan of action designed around ESG is widely accepted as an imperative for moving forward. We now turn to 2021 and the years ahead to determine if these plans become a catalyst for widespread change in why and how we conduct our business.

Year of Commitment

In 2020, ESG went mainstream among corporate leaders, and many within our industry made public commitments to all stakeholders to be a force for good in the environment and society at large. Companies began by establishing a “new” purpose acknowledging all stakeholders and articulating the impact they want to have in the world. With regard to the environment, one example is Aviva’s bold commitment to tackle the climate crisis. Amanda Blanc, Aviva Group Chief Executive Officer, said, “We have a huge responsibility to change the way we invest, insure and serve our customers.”  The commitment goes beyond Aviva’s footprint and investment strategy by extending into their core insurance/underwriting operations. By the end of 2021, Aviva will stop underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they have signed up to the Science-Based Targets initiative (SBTi), a collaboration between CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF) and the United Nations Global Compact (UNGC), whose goal is to establish science-based environmental target setting as a standard corporate practice.

Both Swiss Re Group and Zurich Insurance Group also established their respective climate commitments by relying on a multi-prong strategy covering their physical footprint, asset management and re/insurance. Moving beyond their corporate footprint, Swiss Re made a public commitment to reach net-zero emissions by 2020 across the whole business, including asset management and re/insurance. Mario Greco, Zurich Insurance Group’s chief executive officer, sets a high standard by stating, “We want to be known as one of the most responsible and impactful businesses in the world.” Regarding the core insurance business, Zurich goes beyond a pledge to understand and monitor the carbon intensity of their underwriting portfolios and developing key metrics to support alignment to a 1.5°C future by also committing to helping their customers successfully navigate the transition.

As it pertains to societal issues, insurers' commitments are equally bold, addressing the needs of employees, customers and vulnerable people at large. One insurer supported emerging digital trends with a new generation of products and services that deliver the best solutions and experiences while maintaining ethical use of customer data (e.g., personal data will never be sold or shared without the insurer being transparent with customers). Digital was recognized as a means for not only serving existing customers better but reaching the disenfranchised, as well.

Commitments to employees went beyond a safe physical presence to include an environment conducive to the employee’s success and mental well-being. Employees were promised meaningful work with a clear purpose in a safe, attractive, flexible and inclusive work environment where everyone can contribute. Access to training and skill development needed to succeed in a digital business environment and a culture of inclusivity, collaboration and creativity became core.

As for vulnerable people at large, insurers committed to community outreach, using digital to reach and support the underserved and to deliver resiliency programs in developing countries and poor communities.

In terms of governance, companies began with a pledge toward achieving diverse board representation and in many cases set forth specific targets. Aside from board composition, directors engaged in governing all ESG matters by providing oversight of progress toward delivering on stakeholder commitments as well as oversight of material ESG-related risks (e.g., supply chain disruptions, energy sources and labor practices). Boards also seek to be informed about the company’s approach to dealing with investor requests for ESG-related engagement and external disclosure and requests from emerging ESG-ratings services (e.g., the proxy advisory firm ISS’ new “Environmental & Social Quality Score”).

In summary, 2020 was the year of recognition that a sustainability plan designed in accordance with the ESG framework is not only a force for good but is critical to creating long-term value. The absence of a sustainability plan will likely have reputational impacts and result in significant public, investor and stakeholder relations risk. While companies will consider the value proposition of ESG initiatives relative to other business priorities and opportunities, it is important to recognize that the value derived from ESG initiatives will continue to develop, especially as more institutional investors consider sustainability as an investment priority and more companies take an active but targeted approach.

An Era of Action

The year ahead will be a year of corporate action with accountability at the forefront. Global hopes are high that corporate leaders will play a significant role in building a better future alongside governments, civil society, non-governmental agencies and other such actors. But corporates face a paradox. Corporate leaders are increasingly accepting responsibility for their social, environmental and economic impacts, yet they are not in direct control given the systemic nature or the fact that the impact falls upstream and downstream in their value chain. Consequently, corporate engagement with other external stakeholders is imperative. Business leaders now recognize the importance of not just associations but deeper collaboration to drive progress on common objectives. Surely, the COVID-19 pandemic has demonstrated the power of collaboration between government, the private sector and civil society as well as the unfortunate consequences of its absence. The environmental and societal problems that we face are problems of the global commons. Acting alone, even if intentions are good, will prevent a globally optimal outcome.

  • Imperative of collaboration to drive needed system change — Collaborative research conducted on behalf of the Sustainability Transparency Network (STN) highlighted trends and best practices for corporate practitioners. Companies are being more selective and strategic when it comes to collaborations and moving away from general participation to being an active piece of the puzzle in areas where they have expertise. At the same time, collaborative peer initiatives focused on sustainability are, by their nature, acts of systems change. They seek to shift the status quo by moving best practice within an industry, or even across the entire private sector. There is wisdom in the crowds. Including voices from outside and within the private sector can enhance systems change. A collaborative mindset requires humility, open-mindedness and a willingness to abandon traditional decision models. The collaborative leader is willing to not only accept but expect setbacks, learn from the setbacks and re-engage, as opposed to being punitive or overly reactive. Organizations will need to seek, develop and reward individual competencies needed to support collaborative efforts and trusted relationships, such as those individuals who forge beyond their organization / industry to form “boundary-spanning” partnerships. How corporations foster collaboration among leaders to draw on the wisdom of the crowd, and who is included in the crowd, will untimely determine success.
  • Evolving metrics and tracking systems for informing and validating progress — To date, corporations substantiated their commitment by setting high-level targets or referencing programs currently in operation. Going forward, companies will develop explicit metrics as well as systems for tracking and reporting progress relative to the metrics. Additionally, companies will provide clarity as to how these metrics map to value creation within their own company as well as throughout their value chain and within the economy at large. The association is supported by research, although individual companies will now develop unique roadmaps for building network effects across their various programs, resulting in globally optimal solutions.
  • Better governance of information through harmonization — Clarity, consistency and comparability of ESG data remain key challenges. With any new initiative, multiple normative standard setters evolve and in time consolidate or align to achieve a uniform corporate reporting norm. Regulatory authorities and rating agencies are following suit. In recent months, the New York Department of Financial Services, AM Best, Lloyd’s and EIOPA have all made pronouncements. In the meantime, leaders will learn from and select across the varying standards, many of which are not auditable or validated by outside authorities. Boards will need to be aware that regulation and harmonization is evolving, therefore directors are encouraged to be inquisitive about indicators of success against a self-selected framework.

The Years Ahead

The most recent year is the first in a decade that could recalibrate the role of business in delivering on purpose. It has been a daunting year, and more challenges lie ahead. Challenges such as the need to develop an ESG mandate beyond investments to include the core business of insurance/underwriting, the lack of consistency over ESG data quality and disclosures and the need to truly adapt to a collaborative mindset. Furthermore, as an industry we are facing challenges as we broaden the meaning of “E” in the ESG paradigm beyond climate to recognize biodiversity, water pollution and the circular economy. Likewise, we are grappling with the breadth and ever-increasing momentum around social resilience. We are on a multi-year journey, with next year being a year of action toward building truly resilient organizations and systems. Stakeholder capitalism is here to stay, and “triple-bottom-line” goals of people, planet and profit are, in fact, mutually reinforcing. It seems clear that 2021 will indeed be The Year of a New Beginning.

This piece was originally published at

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IIS serves as the inclusive voice of the industry, providing a platform for both private and public stakeholders to promote resilience, drive innovation, and stimulate the development of markets. The IIS membership is diverse and inclusive, with members hailing from mature and emerging markets representing all sectors of the re/insurance industry, academics, regulators and policymakers. As a non-advocative organization, the IIS serves as a neutral platform for active collaboration and examination of issues that shape the future of the global insurance industry. Its signature annual event, the Global Insurance Forum, is considered the premier industry conference and is attended by 500+ insurance leaders from around the globe.


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