Insurance companies are stopping to issue policies for occupations and companies that do not meet environmental, social and governance (ESG) standards such as coal miners, gambling operators, nuclear power generators, arms and tobacco producers.
ESG consideration has been getting significant momentum across the asset management industry where stocks and investments are screened to ensure investments are not directed into industries or products that harm the environment, have poor working conditions or could be involved in bribery and corruption.
In the same way, insurance companies are implementing underwriting ESG screening criteria to determine what companies and occupations they will insure and do business with.
Big insurance brands like Axa, Zurich, Munich Re, Swiss Re AG, Hannover Re and Allianz do not offer policies to coal power plants, weapon producers or companies that have bee banned by international agreements.
Most companies are looking to broaden their exclusions. However, national laws may prevent insurance companies from doing so.
The implementation of ESG underwriting by big insurance brands has been mainly voluntarily. However, there are still companies offering policies to companies with controversial practices and occupations.
When exploring investments and insurance make sure you assess their Environmental, Social and Governance (ESG) approach and that it aligns with your personal interests and goals.
By Carlos Mauleon insights contributor Responsible-Investors.com