Skip to content
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
Insurance Journal - Property Casualty Industry News

Featured Stories

  • Former AIG Exec McElroy Faces Sex Assault Charges
  • Aon Promotes Reinsurance Leaders
  • Articles
  • Jobs
  • Markets

Current Magazine

current magazine
  • Read Online
  • Subscribe
  • Login
  • Front Page
    • National
    • International
    • Most Popular
    • Magazine
    • Forums
    • Blogs
    • Videos/Podcasts
    • Newsletters
  • News
    • Most Popular
    • National
    • International
    • East
    • Midwest
    • South Central
    • Southeast
    • West
  • Magazines
  • Research
  • Directories
  • Jobs
  • Features
    • Events
    • Forums
    • Market Directories
    • Quotes
    • Polls
    • Rankings & Awards
    • Insurance Giving Back
  • Subscribe
Insurance and Climate Change column

S&P Will Issue ‘Environmental, Social and Governance’ Evaluations Including on Insurance Sector

By Don Jergler | April 18, 2019
Email This Subscribe to Newsletter
  • Article

If you’re among those who regard “environmental, social and governance” as just another in a long line of trendy buzz-phrases, then you may want to rethink.

ESG standards, which companies use to highlight operations that interest socially conscious investors, will now be officially evaluated and measured by S&P Global Ratings.

The ratings giant on April 11 announced the roll out of its ESG Evaluation, describing it as “a new benchmark that provides a cross-sector, relative analysis of an entity’s capacity to operate successfully in the future.”

According to S&P, the ratings are based on how ESG factors could impact a company’s stakeholders and potentially lead to a material financial impact.

The ESG Evaluation is a separate product from credit ratings and will be conducted at the request of the companies themselves, according to Mike Ferguson, director of sustainable finance for S&P Global Ratings.

He said to expect the first of the evaluations to be released soon.

“There’s a lot of interest in this space to be sure,” Ferguson said.

Assets invested in line with ESG-related strategies reached $30 trillion last year, according to the Global Sustainable Investment Alliance. A recent study from BNP Paribas Securities Services shows 90 percent of respondents predicting that more than a quarter of their funds will be allocated towards ESG by 2021.

That interest may be driven by socially conscientious investors and consumers who are in part worried about climate change, what can be done about it and what global warming will do to the world’s business climate.

“The scientific consensus is the physical risks of climate change have grown over time,” Ferguson said.

He noted that the scientific community and others in recent years have amplified their calls for regulators to take more immediate action, thus creating more risk for companies that are, for example, heavily invested in fossil fuels. One group of climate change activists recently submitted a petition to California’s insurance commissioner urging him to place new regulations on insurers to disclose what projects in the fossil fuel industry they underwrite.

ESG Evaluation scores will rank from 1-100, with ratings holding the same weight despite the industry in which a company exists – a score of 88, for example, would mean the same for a copper miner in Chile, a utility in the U.S. or a financial institution in Japan.

The scores in part will be based on engagement with a company’s management team, according to Ferguson.

The evaluation is currently available for entities in the corporate, infrastructure and selected public finance sectors (transportation and power), and over the next few months S&P says it expects to roll out evaluations for banks, asset managers, multilateral institutions, public healthcare, water and sewer entities.

Next in line after those sectors are insurance, social housing, schools and education sectors, according to S&P.

Ferguson said insurance is a bit further down the line because of the large amounts of data to look at. S&P has to pore over the large, long-term investments insurers and reinsurers make, as well as the reams of underwriting data to examine.

“That exposure, if I was looking at a utility, would be very direct,” he explained. “It’s not as direct or as obvious when we’re looking at an insurance company, so it’s an indirect exposure.”

Along with the evaluation S&P Global Ratings launched its ESG Risk Atlas, an online infographic that charts exposure to environmental and social risk for more than 30 sectors. It also incorporates exposure to natural disasters, corporate governance standards and ESG-related regulations.

The Atlas comprises a Sector Risk and a Country Risk component. Sector Risk highlights the relative environmental and social exposures of a comprehensive range of business sectors, while Country Risk considers corporate governance standards, regulations, and exposure to natural disasters in various countries or regions.

Ferguson said the new ESG Evaluation will answer the needs of not just investors and society, but also the companies themselves.

“There has been a market change in the level of interest in ESG in the companies we evaluate,” he said. “It’s almost uniformly become important to management teams.”

Past columns:

  • California Commissioner Yet to Move on Petition from Climate Activists for More Insurer Regs
  • Climate Activists to Pressure U.S. Insurers Underwriting Fossil Fuel Industry
  • California Weighs Buying Disaster Insurance Policy to Cover Wildfire Costs
  • The Polar Vortex And Climate Change
  • Enviro Risks, Climate Change Lead Concerns in World Economic Report

Topics Trends California Legislation Pollution Climate Change

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

Florida Meteorologist Predicts Where the Next Hurricane Will Hit, For a Price
People Moves: Consilium Taps Carpenter’s Coleman for C-Suite After Co-CEO Baird Suddenly Exits; Everest Promotes Shaw as Chief Commercial Officer of Int’l Division
Air India Junior Pilot Asked Captain Why He Turned Off Fuel Switches
New Book Proposes Four-Prong Legal Strategy to Negate Nuclear Verdicts

Written By Don Jergler

Latest Posts:
  • California Surplus Lines Take-Up Soars as Brokers Work to Find Coverage for Clients
  • Climate Group Says State Farm Rate Hike to Cost California Homeowners $1,000
  • Zurich Offers ‘Roadmap’ to Prep Businesses, Governments for Climate Change
  • How Westfield Is Implementing AI in Claims
More From Author

Interested in Climate Change?

Get automatic alerts for this topic.

Email This Subscribe to Newsletter
  • Categories: National NewsTopics: Climate Change, Climate Control, Environmental, environmental social and governance (ESG) criteria, ESG, global warming, S&P Global Ratings
  • Have a hot lead? Email us at newsdesk@insurancejournal.com
More News
Cayman Islands Approves 21 New International Insurance Licenses During H1
Former Tennessee Agent Sentenced For Continuing to Sell Insurance Products
People Moves: Aon Appoints Key Leaders in EMEA Commercial Risk Team; AXA XL Promotes Wilkinson to Head of International Casualty, Retail, UK & Lloyd’s
Trump Nominates Two Lawyers to Seal Republican Control of US Labor Board
More News Features

Read This Next

  • S&P Will Issue 'Environmental, Social and Governance' Evaluations Including on Insurance Sector
  • Viewpoint: Rising False Advertising Claims Reveal Major Coverage Protection Gap
  • Insured Losses From US Hurricanes Could Rise by 50% With Global Warming
  • Central Texas Floods Highlight State's Risky Profile, Triple-I Analysis Finds
  • Three Insurers Join Ward's Annual Top 50 P/C Ranking for 2025

Insurance Jobs

  • Director of Property Liability Claims - Wilsonville, Oregon
  • Vice President of Life Operations - Lansing, MI
  • Project & Program Management Senior Consultant I - South Carolina, SC
  • Direct Sales Agent Specialist (2774) - Chattanooga, TN
  • Software Engineer II – Enterprise Artificial Intelligence - Hartford, CT
MyNewMarkets
  • How Embedded Insurance Supports Real Livelihoods in the Growing On-Demand Economy
  • How to Keep Third-Party Events from Becoming First-Party Losses
  • Is It Covered: Auto Coverage Under a CGL Policy
  • When Harassment Follows You Home: Managing EPL Risk in a Remote Work Era
  • Trouble Brewing? 6 New Risks for Winery and Brewery Clients
Claims Journal
  • Singapore Says Cyber Espionage Group Targeting Critical Infrastructure
  • UK Court Rules JP Morgan Must Stop Greek Lawsuit Against Viva Directors
  • Tesla Settled Over Autopilot Crash With Truck Crossing Highway
  • Judge Allows US Authors Suing Anthropic to Band Together in Copyright Class Action
  • As Extreme Heat Scorches US, Employee Protections Stalled by Politics
Academy of Insurance education
  • July 22 How To Write: Umbrella
  • July 24 Navigating The Impact of Hospital Closures on Workers' Compensation
  • July 31 In The Wake: Personal Lines Issues After a Huge Storm
  • August 7 EPLI Basics

Insurance News

  • News by Region
  • News by Topic
  • Yesterday

Site Search

Features

  • Insurance Markets Directory
  • Forums
  • A.M. Best Company Ratings
  • Industry Events
  • Agencies For Sale
  • Newswire
  • Insurance Jobs
  • Rankings & Awards

Connect with us

  • Email Newsletters
  • Magazine Subscriptions
  • For Your Website
  • RSS Feeds
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Insurance Journal

  • Submit News
  • Advertise
  • Subscribe
  • Reprints
  • Link to Us
  • Contact Us

Wells Media Group Network

  • Insurance Journal
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
© 2025 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map