ESG: why size matters

01-04-2022

ESG: why size matters

Gerald Chen-Young, principal, GCY Associates; Dan Topping, CIO, BP Marsh

With sustainable investment well ahead of ESG integration elsewhere in the re/insurance industry, the sector badly needs someone to take the lead. It won’t be down to regulation alone, an Intelligent Insurer panel heard.

By any measure, 2021 was a bumper year for investments focused on environmental, social and corporate governance (ESG) issues. According to financial analyst Lipper, global flows into ESG funds in 2021 hit $814 billion. Total assets grew 17 percent to pass $7 trillion.

Sustainable bonds issuance—traditionally the poor relation in ESG finance—hit $1 trillion, up 45 percent and a 20-fold rise since 2015. They now account for 10 percent of global debt markets.

As the panellists in Intelligentinsurer.com’s discussion of the issue agreed, that has been felt across the insurance industry. And it’s not wholly new. Jessica Botelho-Young, associate director of analytics at AM Best, recalls that even two years ago, a survey by the agency of its European and Asia-Pacific-rated businesses showed more than half already integrating ESG factors into their investing activities. A further 15 percent said they intended to start considering ESG criteria in their investment approach within 12 months.


GCY Associates, AM Best, BP Marsh, Investing, ESG, Climate Change, Insurance, Reinsurance, Gerald Chen-Young, Jessica Botelho-Young, Dan Topping, Global

Intelligent Insurer