ISSB & CSRD Gap Assessment and Readiness Analysis for a General Insurer
Objective:
To conduct an ISSB & EU CSRD Gap Assessment and provide a comprehensive Readiness Analysis, aligning the insurance firm’s ESG initiatives in lockstep with global standards and evolving climate and general sustainability reporting requirements.
Engagement Overview:
SustainOpp collaborated with a burgeoning insurance firm to assess and bolster its alignment with the International Sustainability Standards Board (ISSB) standards. The project pivoted on a two-pronged approach: Gap Assessment and Readiness Analysis.
1. Gap Assessment: drawing from the best practices in SASB’s implementation primer, SustainOpp embarked on an iterative process:
• Materiality Assessment: Curated a matrix juxtaposing ESG factors pertinent to insurance operations with short, medium and long-term financial and operational implications. Special attention was given to acute and chronic physical climate-related risks, given the sector’s vulnerability to such exposures.
• Disclosure Benchmarking: Meticulously compared the firm’s current ESG disclosures with ISSB and CSRD requirements, charting discrepancies in both qualitative and quantitative metrics.
• Risk Profiling: A granular evaluation of how the existing ESG metrics intertwined with the firm’s actuarial analyses, claims management, and portfolio investments. This helped identify latent vulnerabilities, especially in risk pricing and reserving.
2. Readiness Analysis: Post the Gap Assessment, our focus shifted to readiness:
• Alignment with ISSB and CSRD Reporting: Leveraging insights from ISSB and CSRD reporting rules, we crafted a roadmap for the insurance firm to enhance its non-financial reporting, ensuring alignment with the European Single Access Point (ESAP), digital reporting and other disclosure requirements.
• Stakeholder Engagement: Designed a robust stakeholder engagement plan, recognising the critical role of investors, customers, employees and other stakeholders in shaping the firm’s ESG narrative.
• Integration Strategy: Advised on embedding ESG factors into the firm’s core operational frameworks, from underwriting to investment decision-making, ensuring holistic adoption.
Tools & Tech Implementation:
• Introduced an ESG data analytics platform for real-time monitoring and reporting.
• Deployed AI-driven tools for predictive analysis on ESG-related risks and opportunities.
Outcome:
Upon completion, the insurance firm was not just aligned with ISSB and CSRD standards but was poised as a frontrunner in sustainability transparency and reporting amongst similar-sized general insurers. The tangible results manifested in:
• Enhanced transparency in ESG disclosures, meeting and often surpassing industry-specific benchmarks.
• A risk framework more resilient to climate-related events and shocks, evident in their subsequent actuarial valuations.
• A demonstrably positive stakeholder sentiment, translating to an uptick in policy renewals and a more favourable investment disposition from ESG-focused funds and institutional investors.
Continuity Plan:
Post-engagement, SustainOpp recommended a semi-annual review mechanism to ensure continued alignment with the rapidly evolving sustainability reporting landscape, ensuring the insurance firm remains at the vanguard of ESG excellence.
Given the evolving nature of ESG regulations and market expectations, SustainOpp also recommended the establishment of an internal ESG oversight committee. This body would convene quarterly, ensuring that the firm’s sustainability initiatives remain agile, relevant, and in harmony with global best practices.