Sustainable Insurance Assessment: Towards an Integrative Model
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Sustainable Insurance Assessment: Towards an Integrative Model Fla´vio G. Nogueiraa, Andre´ F. P. Lucenaa and Roberto Nogueirab a
Energy Planning Engineering, COPPE, The Alberto Luiz Coimbra Institute for Graduate Studies and Research in Engineering of The Federal University of Rio de Janeiro, Rio de Janeiro, Brazil. E-mail: [email protected]; [email protected] b COPPEAD Graduate School of Business, The Federal University of Rio de Janeiro, Rio de Janeiro, Brazil. E-mail: [email protected]
This paper investigates the corporate social responsibility of insurance companies. The assessment procedures available today do not use environmental, social and governance (ESG) risk variables. We propose an integrative model to understand how progress in ESG risk underwriting can influence the management of ESG issues in insurance operations. This model was developed and tested by conducting a survey of 98 insurance professionals in Brazil. The model indicates only environmental and governance constructs as measurement discriminants. We have found a positive relationship between company size and progress in ESG risk underwriting and ESG issues in insurance operation management constructs. Additional analysis of the gap between ESG risk materiality and product offer provides a road map for harnessing local opportunities. The Geneva Papers (2017). doi:10.1057/s41288-017-0062-3 Keywords: sustainable insurance; ESG risk assessment; Brazil; UNEP FI Article submitted 26 January 2016; accepted 4 April 2017
Introduction The concepts of sustainability and sustainable development (SD) were internationally established in the World Conservation Strategy by the International Union for Conservation of Nature and Natural Resources (IUCN)1 and became widely recognised through the Brundtland Commission (1987) report. At their core, they deal with ensuring the interests of future generations without reducing current development. However, the concept of sustainability has several definitions in the literature2; they usually encompass economic, environmental and social aspects.3 On the other hand, there is no strong consensus on what sustainable development means.4 The incorporation of sustainable development goals in business organisations is referred to as corporate social responsibility (CSR). The implementation of CSR requires strategies and operational practices to include environmental, social and governance (ESG) issues in 1 2 3 4
IUCN (1980). Pezzey (1997). Van der Vorst et al. (1999); Giddings et al. (2002). Daly (1990); Le´le´ (1991); Mebratu (1998); Reddy and Thomson (2015).
The Geneva Papers on Risk and Insurance—Issues and Practice
business through the development of relationships with different stakeholders, ranging from employees to social communities.5 There are, however, various definitions for CSR, from concept and strategy to operation integration procedures.6 There is a debate on whether CSR and sustainability are synonyms. Some authors state that it is not appropriate to consider them as synonymous bec
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