Sustainability action to strengthen insurance ESG
Climate change pressure brings not just challenges, but opportunities
One of the most pressing demands on motor insurance companies today is sustainability. And adjusting internal practices is no longer enough. To be recognized as leaders in sustainability, motor insurers need to evaluate the whole supply chain and shout louder about their green credentials. Thankfully, infusing artificial intelligence (AI) into their sustainability strategies can help motor insurers accelerate the achievement of climate change goals and uncover new green business opportunities.
Sustainability demands are increasing
With the United Nations calling for urgent environmental action globally and the development of new sustainability reporting standards underway, the pressure has never been greater for organizations to measure, reduce, and report on their climate impact.
Additionally, in early 2022, the European Commission published a proposal for a Directive on Corporate Sustainability Due Diligence. If this comes into force it will impose, on EU companies and those in the UK who operate in the EU, due diligence obligations covering the environmental impacts of their own operations as well as those throughout the supply chain.
Due to the nature of their operations, going green is a reachable target for insurers. But it’s a different story if they need to start examining the green credentials of their own suppliers. And exploring how to influence their customers to adopt more sustainable behaviors. Demonstrating stronger ESG (Environmental, Social and Governance) commitment throughout the supply chain is a challenge – but it can also be a valuable business opportunity.
Customers expect sustainability transparency
Demand is changing in motor insurance. Customers not only want products that offer flexibility, they want products that are better for the environment. Going paperless is not enough and is often seen as merely cost cutting. Consumers are looking for brands which are really going the extra mile. And can influence their customers with their own green choices.
We’ve already started seeing this across many industries. In the travel industry, for example, package holiday companies are presenting “green” hotels to customers. In e-commerce, consumers can select delivery options which are more environmentally friendly. Such demand is likely to increase. And it’s time for all industries, including insurance, to consider how to offer eco-friendly products and services.
Due to its role in risk management, the insurance industry is already recognized as influential. By listening to customers and utilizing AI to meet those needs, insurers can secure a place at the forefront of climate action.
Company reputation is at stake
The lack of uncertainty around sustainability requirements is a challenge. But while sustainability action is largely still non-mandatory, that won’t be the case for long. And it’s important for motor insurers to prepare now. Companies that don’t talk about their green credentials will be assumed to be doing nothing – not just by customers, but by potential employees as well as suppliers and investors. On the flip side, organizations claiming to be sustainable without being able to back up the claims risk their reputation.
Awareness of greenwashing is ripe, and stakeholders are on high alert. Hiding operating practices behind closed doors is not an option. In today’s world, organizations need to not only take sustainability action, but to be transparent. Thankfully, AI is providing motor insurers with the data they need to influence climate change and to support their claims.
Partnerships can accelerate sustainability action
Most motor insurance companies do not have the internal resources to enable sustainability change and elevate ESG efforts fast enough. But demonstrating commitment to ESG is critical against a backdrop of rapid transformation across all industries. This is where partnerships come in.
Successful partnerships can accelerate climate change goals. Even better, they can eliminate common concerns such as the time and effort required, or a lack of data consistency. At Greater Than, we help companies address nine of the UN’s Sustainable Development Goals. This is through products that convert GPS data into sustainability insights.
Driver data insights that benefit driver, insurer, and planet
Greater Than’s AI technology has been trained through over 7 billion real-world trips to accurately identify a driver’s environmental impact and generate an individual Climate Impact Score. By partnering with us, motor insurers can identify CO2 saved in either grams or percentage, as well as EV battery savings, simply by sharing their GPS data.
At the commercial fleet insurance level, this provides a uniform measure of employee eco performance regardless of vehicle type, fuel used, or location. It also helps companies report on their ESG initiatives and CO2 emissions and savings. At the driver level, the new insights can be shared with the driver to encourage them to be more eco-friendly.
To discover how Greater Than’s AI can help your motor insurance company accelerate its climate change goals please contact Greater Than or book a meeting with me.
