Chaucer, in collaboration with Moody’s, embed their ESG Balanced Scorecard across underwriting, investments and operations, driving real change in the way ESG is managed and measured.

Chaucer, the global specialty (re)insurance group, in collaboration with Moody’s, the integrated risk assessment firm, today roll out their ESG Balanced Scorecard across underwriting, investments and operations. The data driven scorecard will measure the ESG performance of clients and business partners, helping them to become more sustainable.

The scorecard’s design combines Chaucer’s insight into counterparty risk with Moody’s deep ESG and risk modelling expertise to evaluate businesses’ risks and opportunities at an in-depth level. By delivering a calibrated output, driven by Moody’s comprehensive ESG assessments coverage and double materiality methodology, Chaucer will be able to derive its own ESG profile and help its counterparties understand their risk both from a stakeholder and an enterprise perspective.

The ESG Balanced Scorecard uses 158 unique data points to assign scores for corporates across Environmental, Social and Governance factors and is designed to be a holistic approach to ESG measurement across underwriting, operations, and investments. Metrics upon which corporates are rated include:

  • disclosure of greenhouse gas emissions
  • integration of environmental factors into the supply chain
  • health and safety conditions of workers
  • involvement in the local community and support of local infrastructure
  • boardroom diversity
  • among many others

The ESG Balanced Scorecard has been 18 months in the planning, with more intensive development and refinement taking place in the period from February to today’s launch.

Chaucer says the adoption of ESG scorecards across the (re)insurance industry would be a valuable initiative, not only enabling (re)insurers to manage their own ESG profiles but also helping (re)insurers better understand potential risks and areas for improvement related to the ESG of their customers.

One of the aims of the scorecard is to help incentivise businesses to make greater disclosures relating to ESG factors (those businesses get a rating for the transparency in the reporting of ESG metrics). Chaucer says that the major challenge facing the (re)insurance industry is having access to relevant and reliable ESG data to assess counterparties.

John Fowle, Chief Executive Officer of Chaucer says:

“The (re)insurance industry has a pivotal role to play in helping corporates make the transition to become more sustainable. This isn’t going to happen overnight but by helping clients identify, manage and measure areas that are in need of improvement, we can help them implement incremental changes that will pay dividends in the long-term.”

“(Re)insurers also need to consider their own ESG profiles and what action the industry as a whole can take to improve its credentials. The data provided through the ESG balanced scorecard will help Chaucer and other (re)insurers establish their strengths and weaknesses and give them a steer on which areas need greater attention or investment.”

Colin Holmes, General Manager of Insurance at Moody’s Analytics, says:

“Chaucer has been a crucial development partner to help us reach this point. We are delighted they have been able to leverage the capabilities of our ESG insurance underwriting solution to create a first-of-a-kind ESG balanced scorecard to provide a transparent and authentic approach to ESG risk assessment.”

Published on 07.09.2022