Advice on Net Zero and ESG Reporting From A4S

There are lots of things to consider when it comes to Net Zero, ESG and other reporting regulations. Insurance brands face differeing demand sin various regions, but for the EU, UK and North America assume that the most time-consuming box-ticking will be required each year. All that can mean outsourced help with the regs, here’s the word from A4S;

A4S has produced top tips guidance for the finance teams of insurers and reinsurers for calculating their emissions baseline.  

Insurance-associated emissions – the scope 3 emissions associated with their insurance policies – is where their environmental impact is typically most significant. However, insurers and reinsurers have been slower off the mark compared to other financial sectors and institutions in tackling climate change, as guidance on doing so has only recently become available. 

In response, this guidance from A4S aims to support finance teams in the insurance industry to operationalise current guidance and understand their impact. The guidance also includes a case study and other resources produced to support finance teams.  

By acting now on insurance associated emissions, insurers and reinsurers will be able to stay ahead of the regulatory mandates and have the advantage of refining their approaches over time. By being able to measure their scope 3 insurance-associated emissions, finance teams at insurers and reinsurers can establish a baseline that can allow them to make decisions that are better and more aligned to a net zero insurable economy. 

The top tips include: 

1. Consider the PCAF Standard Insurance Associated Emissions (Part C) 

In applying this methodology, you can develop an understanding of the standard that will be helpful as it continues to develop beyond personal, motor and commercial into more business lines. Using a consistent methodology for calculating a baseline can help prevent divergence in approach between different re/insurers. 

2. Refine your approach 

Consider focusing on specific operating entities or lines of business that have high emissions and where the quality of data is good. Focusing on a smaller subset of your portfolio to start with can enable you to establish and strengthen your processes, governance and controls before expanding to cover other operating entities or lines of business.  

3. Draw on the right expertise 

For a more effective process, make sure that the responsibility for calculating and measuring insurance-associated emissions is allocated to those with the right skills – which can mean setting up a cross-functional team.   

Your existing processes, controls and governance for financial information can be used as a robust starting point for insurance-associated emissions information, to strengthen data management. 

4. Embrace the data challenge  

Data availability presents a key challenge for calculating both insurance- associated and financed emissions. The PCAF Standard includes different approaches to measuring emissions depending on the type of data available, identifies potential sources of external data and provides guidance on data quality scoring. 

There are many more tips, plus the Guidance can be downloaded here;

https://www.accountingforsustainability.org/en/knowledge-hub/guides/insurance-associated-emissions-top-tips.html