ESG is firmly at the forefront of the collective minds of the investment community. Both governmental and social pressures mean that supporting businesses which are making a positive impact are a significantly more attractive place into which to deploy capital.
Historically, investment managers have been considered by the insurance sector to be a significant risk. With such large amounts of money at stake and well-resourced counterparties involved, expensive litigation is a regular occurrence which results in high premium levels and limitations on available coverage.
Typical examples of claims likely to be made against investment managers come as a result of
However, a shift towards sustainability investing has undoubtably affected the risk landscape. Being uniquely positioned as both highly technical insurance brokers and advocates of sustainability, we can see how ESG investing delivers a reduction in risk to insurers of investment managers participating in this sector.
Sustainability typically attracts investors who are looking to make a positive impact. Working for the collective good will be at the top of their agenda and if funds have been used to support truly impactful causes, a rate of return is likely to be less concern to an ESG investor. Accordingly, they are much less likely to enact opportunistic litigation than a conventional investor.
And whilst there are bad eggs in every box, it is fair to say that investment managers that have been specifically established to participate in the ESG space are likely to present a lower moral hazard by simply doing the “right things” further reducing the likelihood of an insurance claim.
We can offer insurance solutions to properly protect investment managers focusing on sustainable investing. Policy coverage would typically include:
Please contact our highly experienced team to find out more information on how we might be able to better protect your organisation.
We use insurance products and capacity to protect pro-ESG organisations and help to facilitate their growth.
Sustain Insurance Brokers is a trading name of Sustain Brokers Limited which is registered in England and Wales under company registration number 14309360. Sustain Brokers Limited is also an appointed representative of TEn Insurance Services Ltd, trading as Eleven, which is authorised and regulated by the Finance Conduct Authority (FRN 314593).
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