Chaucer, a global specialty reinsurance group, has collaborated with risk assessment firm Moody’s to roll out a data driven ESG scorecard across underwriting, investments, and operations. The scorecard will measure the ESG performance of clients and business partners, helping them achieve sustainability goals.
The ESG Balanced Scorecard combines Chaucer’s counterparty risk insight with ESG and risk modelling from Moody’s to provide an evaluation of businesses’ risks and opportunities for improvement. It uses 158 unique data points to assign scores for corporates based on different environmental, social, and governance factors. Some of these metrics include:
- Disclosure of greenhouse emissions
- Integration of environmental factors into the supply chain
- Health and safety conditions of workers
- Involvement in the local community and support of local infrastructure
- Boardroom diversity
Chaucer calls this new effort a “valuable initiative” for the industry, helping insurers to manage their own ESG profiles and incentivising businesses to make greater disclosures in relation to ESG factors.
“The reinsurance industry has a pivotal role to play in helping corporates make the transition to become more sustainable,” said Chaucer CEO John Fowle. “This isn’t going to happen overnight but by helping clients identify, manage and measure areas that are in need of improvement, we can help them implement incremental changes that will pay dividends in the long-term. Reinsurers and insurers also need to consider their own ESG profiles and what action the industry as a whole can take to improve its credentials. The data provided through the ESG balanced scorecard will help Chaucer and other reinsurers and insurers establish their strengths and weaknesses and give them a steer on which areas need greater attention or investment.”
“Chaucer has been a crucial development partner to help us reach this point,” added Colin Holmes, general manager of insurance at Moody’s Analytics. “We are delighted they have been able to leverage the capabilities of our ESG insurance underwriting solution to create a first-of-a-kind ESG balanced scorecard to provide a transparent and authentic approach to ESG risk assessment.”
The ESG Balanced Scoreboard has launched after 18 months of planning, with intensive development and refinement starting last February.