Insurers Up Scrutiny Of Companies' ESG Strategies

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By Daphne Zhang (May 2, 2022, 9:18 PM EDT) — Insurance companies are looking deeper into businesses’ environmental, social and governance programs, but both underwriters and policyholders have struggled to measure ESG risks in the absence of clear and common standards and regulations.

ESG risks can range from environmental and sustainability issues to employee health and well-being, cybersecurity protocol, board diversity and a business’ handling of sexual harassment claims. When not managed well, the risks could hurt the financial situation or reputation of a business, even if the underlying claims are covered under its directors and officers insurance.

In recent years, insurance underwriters have strengthened their scrutiny of companies’ ESG strategies,…

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