South African ICMIF member African Risk Capacity Ltd (ARC Ltd) has once again earned the global insurance industry’s top overall environmental, social and governance (ESG) score from independent ESG research firm, Sustainalytics.
ARC Ltd’s ESG score was calculated following an independent audit of the company’s business practices and policies. The evaluation is a comprehensive assessment of an organisation’s preparedness to meet future risks and opportunities linked to ESG factors, such as climate change, regulatory risk and reputational issues, on a scale of 0 to 100, with 0 indicating the lowest risk. Last year, ARC Ltd had a score of low risk at 10.2, and this year the mutual has dropped to the level of negligible risk this year with a core of 5.7.
- Leadership position in Insurance Sector and Diversified Insurance Sector
- Improving from low risk to negligible risk
- An ESG risk rating of 5.7 – the lowest among global peers
- 80.3 management score (how well ARC manages ESG programmes, practices and policies)
- Negligible risk ratings in Data Privacy and Security, Corporate Governance, Human Capital, Business Ethics and ESG Integration
Ange Nothando Chitate, Chief Operating Officer, ARC Ltd said: “This independent validation of our commitment to sound ESG practices within the business bolsters our vision to cover the continent’s most vulnerable communities facing the vagaries of climate change events. We achieve this through partnerships with like-minded organisations that share our vision and commitment to sustainable ESG practices.”
As a leader in ESG among stakeholders in Africa’s insurance sector, ARC Ltd. is a signatory and driver of the Nairobi Declaration, aimed at committing the continent’s insurers to better integrate ESG into their business models, in alignment with the goals envisioned by the Net- Zero Insurance Alliance.
“We are determined to play an active role in promoting the economic, social and environmental sustainability that has become so crucial in the world today. All stakeholders within the African insurance industry – from risk managers to insurers and investors – have a critical part to play in promoting sustainable development on the continent,” says ARC Ltd. CEO Lesley Ndlovu.
“We encourage others in the industry to take the initial step of becoming a signatory of the Nairobi Declaration, but also advise that it represents just the first footfall on a path towards numerous different activities and accommodations like those illustrated in our independent ESG risk assessment by Sustainalytics. We can all play our part,” Ndlovu concludes.
Founded in 2014, the African Risk Capacity Limited (ARC Ltd.) is a hybrid mutual insurer and financial affiliate of the African Risk Capacity Group. The organisation provides parametric insurance services to African Union Member States and farmer organisations, employing innovative financing mechanisms to pool disaster-related risk across Africa and transferring it to international risk markets.
In so doing, it improves the continent’s response to climate-related disasters and contributes to resilience building and ultimately to food security. Efforts are ongoing to ensure the ARC product portfolio is reflective of the needs of Member States and provides progressive solutions to weather-related disasters.