Five ways for motor insurers to support the net zero transition
The recent COP28 climate conference saw a renewed global commitment to carbon emission reductions. And, with 2024 only days away, Environmental, Social & Governance (ESG) reporting requirements are about to apply to more companies. Commercial motor insurers can play a pivotal role in accelerating a reduction in transport CO2 emissions. Here are five actions to take now.
1. Collaborate with customers
Collaboration looks set to be a key trend in 2024, particularly in relation to ESG and sustainability management. Under the GHG protocol, ESG regulations will require reporting companies to manage Scope 1, 2, and 3 CO2 emissions. The implication of this is that, to manage Scope 3 emissions, companies will need to work with their supply chain partners to address emissions outside of their direct control.
The results of a 2022 study by the Traffic Injury Research Foundation were recently released. The study looked closely at the correlation between eco-driving and crash risk – and to no one’s surprise, the results showed a direct correlation, with good eco-driving practices resulting in reduced collision risk.
For you, as a commercial motor insurance company, there is a clear opportunity to collaborate with customers on their decarbonization plans. Helping to measure and mitigate emissions through eco-friendlier behaviors (which also reduce risk) positively impacts profitability for both parties. The sooner you do this, the sooner your customers can ramp up their sustainability efforts and the sooner you will also benefit.
2. Innovate and embrace new technology
Driving the net zero transition forward will require new, innovate, ways of thinking. Your customers are thirsty for technology that will help them address their sustainability and ESG goals, and you are able to guide them on the technology journey.
The insurance industry is synonymous with managing risk. Therefore, when it comes to managing crash risk and addressing ESG obligations (particularly the ‘social’ aspect of ESG), your customers may turn to you for support. If your customers are looking for best practices to measure and reduce their impact on the environment, make sure you already have the answers they are looking for.
3. Quantify transport CO2 emissions
You might not realize it, but you already have the necessary data at your fingertip. That is, GPS data, that contains a lot of hidden information. Yes, you can already help your customers to optimize routes, track mileage, manage safety, and so on. But, by uncovering new insights from your GPS data you can also quantify their CO2 emissions and savings at the driver level. With this data, your customers can manage, report on, and reduce environmental impact.
What’s more; with climate impact insights across your portfolio, you can help steer your customers towards net zero emissions as well as lower crash risk. You can identify the customers with the highest and lowest climate impact, as well as reasons why. This enables benchmarking across companies, industries, and against global parameters. All this while enhancing your product offering to meet the needs of businesses today.
4. Incentivize emissions reductions
Once you’ve measured something, you can start to change it. With new climate impact insights across your portfolio, you can provide tailored feedback to incentivize more eco-friendly driving. We work with some insurers that have or are designing insurance products with integrated climate impact insights.
This is a win-win situation as it strengthens customer engagement for you, while also helping your commercial customers to reduce their emissions. And, in parallel, supporting the global energy transition and working towards net zero across your own portfolio!
5. Support ESG reporting
With your customers’ existing GPS data, you can measure Scope 1, 2, and 3 GHG emissions for sustainability tracking and reporting. You can even develop custom ESG reports for your customers enabling them to:
- Measure absolute CO2 emissions
- Quantify human factor CO2 savings
- Benefit from climate impact benchmarking, reporting and target-setting
It’s easy to get started
At Greater Than, we uncover driver impact insights from your existing GPS data. This includes climate impact and crash probability.
This means that you can help your customers calculate GHG Scope 1, 2, and 3 emissions for sustainability reporting and management.
All that’s needed to get started is 1 km of existing GPS data, that can be easily shared with us via an API connection.
Please contact us or book a meeting to learn more.
