German insurers slow to turn to corporate social responsibility – analysis
Clean Energy Wire
Insurance providers in Germany are slowly beginning to put greater emphasis on their corporate social responsibility (CSR) but still struggle to fully appreciate the concept's importance, consultancy Zielke Research has said. In an analysis of insurers' 2018 CSR performance as seen by Clean Energy Wire, Germany's largest insurer Allianz and competitor Debeka scored best thanks largely to their improved asset management practices. Overall, compared to a previous analysis the relevance of CSR for companies has been growing and the number of insurers receiving a positive rating by the consultancy climbed from 7 to 18 out of 41. Consultancy head Carsten Zielke said the reports, which include the insurers' carbon emissions and other social and environmental indicators, are often too unspecific to give a clear indication of companies' CSR performance. However, reporting by Allianz, for example, demonstrated the company's readiness to apply the so-called ESG (environmental, social, governance) criteria for sustainable finance operations.
Germany is moving fast to ramp up its sustainable and green finance expertise and bring its financial sector in line with national and international climate action efforts. A sustainable finance committee set up by the government has recommended making a standardised application of ESG standards by banks, insurance companies and other financial market actors mandatory. Climate change poses challenges to insurers on several levels. Apart from direct insurance claims associated with more wildfires, droughts or floods, for which existing risk assessment models are becoming increasingly ineffective due to changing weather patterns, insurers also face pressure to eliminate coverage for emissions-intensive projects that could later entail liability risks from litigation, and to withdraw their considerable assets from fossil fuels.