ICMIF member African Risk Capacity (ARC) Limited has received the global insurance industry’s top overall environmental, social and governance (ESG) score.
The ESG evaluation by Sustainalytics is a comprehensive assessment of a company’s preparedness to meet future risks and opportunities linked to ESG factors, such as climate change, regulatory risk and reputational issues.
Sustainalytics’ ESG Risk Ratings also provide investors with third-party validation of the company’s sustainability performance, along with insights into why certain ESG issues are considered material for a company and how well it manages those risks.
ARC Limited CEO Lesley Ndlovu says the organisation’s top ESG score in the insurance industry is reflective of the leadership role it plays in helping to mitigate and manage the effects of climate change on the African continent. “We are proud to have earned the highest ESG ranking in insurance ahead of other prominent global insurance companies.”
“This third-party validation of our business is a great asset for us as we seek to partner with ESG-conscious reinsurers and investors to make a difference on the African continent,” says Ndlovu.
Through this favourable ESG rating, ARC Limited positions itself as an even more attractive partner for like-minded organisations seeking to reach the most vulnerable people in Africa. Through these strong partnerships, ARC enhances its potential to provide rapid financial support to mitigate the impact of natural disasters.
Established in 2014, as the commercial subsidiary of the ARC Group, ARC Limited is a mutual insurance facility providing risk transfer services to African countries through risk pooling and access to reinsurance markets. It provides natural disaster insurance relief to its African Union Member States, including Burkina Faso, Mali, Mauritania, Niger, Senegal, The Gambia, Malawi, and Kenya. Along with its partners, which provide premium support, the insurer has already paid over USD 65million to seven countries to provide drought relief and address the economic concerns these countries’ most vulnerable citizens face.
Most recently, ARC Limited paid out USD 2.1 million to the Madagascar Government to meet the food security needs of over 600,000 people affected by the devastating drought.
“ARC Limited’s role as a parametric insurer is critically important in building resilience and ensuring a country is able to bounce back swiftly after a natural disaster. But beyond that is our firm focus on providing innovative solutions to small and medium scale farmers through partnerships with aggregators and providing reinsurance to local insurance companies,” says Ange Chitate, COO ARC Limited.
ARC Limited’s ESG score was calculated following an independent audit of the company’s business practices and policies. Performed by Sustainalytics, a leading ESG research, ratings and data firm, the assessment considers risks of companies on a scale of 0-100, with 0 indicating the lowest risk.
At 10,3, ARC Limited’s risk rating is the lowest amongst its global peers. No events or policies were identified that may negatively impact stakeholders, the environment, or the company’s operations. In terms of ESG risk management, ARC Limited received a strong score of 66.3, indicating the robustness of the company’s ESG programmes, practices, and policies.
ARC scored low or negligible risk ratings terms of Human Capital, Business Ethics, Corporate Governance and ESG Integration.
The independent endorsement is particularly timely as the Group is raising its profile in the run up to COP26.
