Sustainability is a very broad area and can mean different things to different businesses. But broadly speaking, it’s about balancing profit and purpose, and this balance is becoming more and more important.
According to HSBS, 48% of businesses believe sustainability is key to their growth plans and 57% are planning to increase expenditure in this area1.
Our Allianz expert Carolyn Rich, Head of Brand Marketing and Social Responsibility discusses why sustainability has become a key focus over the last few years and why businesses need to adapt to remain competitive in a changing world.
What is sustainability?
Why is sustainability a popular topic for businesses and what should we expect moving forward?
Sustainability is becoming an important focus for businesses because we have a responsibility to help tackle issues such as climate change. Obviously in insurance we know climate change is not only something we have a moral obligation to help change, but it also impacts directly on businesses.
However, it is also an area which enables businesses to gain competitive advantage by attracting more customers and top workforce talent. According to Mediacom Purpose Tracker, 64% of people said brands have a responsibility to give back to society, and millennials and younger generations want to work for a company that reflects their values.
Therefore, with more customers rejecting unsustainable products, companies need to respond to this changing demand. One way is for businesses to better understand their own environmental footprint and make it a priority to reduce their impact on the environment and contribution to climate change.
How is the insurance industry embracing sustainability?
The insurance industry is already embracing sustainability, and over time there will be more societal changes which the industry will need to respond to via their insurance products. For example, people are moving to electric transport and vehicles which will need insurance products. LV=, has responded to this by creating an electric vehicle product which includes charging point recovery because they understand that one of the barriers to buying electric cars is fear of running out of charge.
Also, there is growing focus to increase recycling within the claims process by opting for restoration rather than replacement. For example, at Allianz our Green Parts scheme looks at using recycled parts within motor claims rather than replacing them with brand new.
What is Allianz doing both in the UK and globally?
Allianz is doing a lot and we take sustainability extremely seriously. We’re really proud to be named the Number 1 Insurer in the Dow Jones Sustainability Index for the past three years.
This has been achieved through Allianz having a comprehensive global climate change strategy that focuses on three areas:
- anticipating the risks of climate change for businesses,
- caring for those who are vulnerable to climate change issues,
- enabling the transition to the low carbon economy through investments and looking at what we insure.
We know that our global investments can have a big impact on the transition to a carbon-free economy and that’s why Allianz is a founding member of the Net Zero Asset Owner Alliance. The Alliance is committed to tackling global warming and reducing carbon emissions through amending their investment portfolios by 2050.
Allianz is also the largest investor in renewable energy, and last year we invested 7.2 billion euros in projects such as 90 wind farms and nine solar farms across the world.
What can brokers do to become more sustainable and advise their customers?
Brokers need to closely look at their business to understand where they can be more sustainable. There are two areas brokers can look at:
- How they run their own business – it is really important they ensure their carbon footprint is minimised in a formalised and systematic way. Introducing an environmental management system is an effective way to manage their environmental footprint and will help see where they can reduce energy and resource usage.
- Keep clients up to date on sustainable insurance solutions - there’s lots of new products, like renewable energy insurance or electric vehicle insurance, that clients may not know is available.
Footnotes:
Author
Carolyn Rich
Head of Brand Marketing and Social Responsiblity Allianz UK
As Head of Brand Marketing and Social Responsibility, Carolyn is responsible for coordinating our sustainability work and environmental, social and governance (ESG) strategy and activity. This means she works with teams across the business to find more sustainable solutions in our business and for our customers.
What is our experts experience related to sustainability?
Carolyn’s background has always been in marketing and communications. She worked for over ten years in the voluntary sector working for big charities and more recently for companies in the insurance industry. Corporate social responsibility has always been a passion of hers and says that she loves working for a company who believes they have an important role to play in making the world a better place.
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Commentary and guidance in this article are provided for information purposes only and are not intended to amount to advice on which reliance should be placed. Readers should seek further advice when dealing with their individual and particular situations. Allianz Insurance plc shall have no liability for any action taken as a result of and in reliance on the information contained in this article.