Why are we doing this program again? A joint approach is therefore more efficient for insurers and their customers and ensures better explainability to the regulator. So let's get started! In order to keep up the momentum and deliver maximum added value, the programme focuses in the first phase on two sectors for which there is support. These are the PCAF Commercial Lines and Personal Motor (see box).
Partnership for Carbon Accounting Financials (PCAF)
PCAF is an initiative of financial institutions that is working on a joint methodology to measure and disclose the greenhouse gas emissions of their loans and investments. PCAF helps financial institutions assess their climate impact, set targets and report to stakeholders.
Specifically for insurers, PCAF is also working on the definitions of insured emissions. That is the emissions of the cars, buildings, etc. in the portfolio of insurers. So far, two definitions have been provided for this, namely for Commercial Lines (ranging from agri, liability to business transport) and Personal Motor (private car insurance). These two definitions form the program scope for Phase 1.
Sector teams
"Two sector teams will first take a close look at the CSRD reports for 2024 of the participating insurers. And then test it against the PCAF guideline. The differences in assumptions and working methods are discussed and the ESG sector standard is determined for each necessary step in the calculation. The available (external) data sources that insurers can use to perform the calculation are also discussed and evaluated. We make use of the knowledge and experience of Covenant partner Deloitte," explains Minkenberg.
"Do people run into data definitions and calculations that we cannot adopt one-to-one? Then the challenge is to harmonise this data or create new definitions."
Validation Committee
Once all that has been worked out, the definitions and calculations are assessed by the Validation Committee. It has the mandate to assess the results (definitions, calculations) and approve them as an ESG standard for the entire sector. After that, the whole thing will be included in a 'data scheme' (catalogue) for the insurers.
Support
Ultimately, ESG industry standards are explained to a wider audience. Think of all insurers who are not subject to CSRD and who do want to report on their insured emissions. By making the standard pragmatically applicable, we want to entice as many insurers as possible to use it. This helps transparency in the sector and ultimately the sustainability transition.
Evaluation Q3
The first phase of the programme will conclude with an evaluation moment in October. The criteria are still being worked on. But according to Minkenberg, the following questions are being considered:
- Has content been successfully created for a shared catalogue or data scheme (incl. interpretation, calculation and data sourcing options)?
- Has workable policy (governance) been put in place for the development and management of the ESG sector standards?
- Do insurers see added value in the joint development of ESG sector standards?
- And most importantly: The extent to which insurers (consider) using the ESG sector standards.
Is the evaluation successful?
"Then from October we will be working on new sector tables (with other insurances in other areas) with which we will further expand the catalogue. Of course, we will take into account the expected changes in CSRD laws and regulations and other relevant developments."
Who does what?
Steering group: Makes decisions on the strategic direction of the program.
Program management: The day-to-day management of the programme, the core team and the sector teams, prepares the decision-making process for steering groups, ensures coordination with insurers and chain partners and mutual communication, and conducts quality management of the results.
Working group: Chooses the priorities of the program. Are ambassadors of the program within his own organisation.
Core team: Supports the sector teams and the Program Management Office (PMO): maintains the timeline/step-by-step plan/action list, and the operational contact with the insurers' experts. Prepares meetings of sector teams and processes (among other things) definitions in the data scheme. Documents the results of the program. Delivers generic ESG knowledge and shares best practices for data management.
Sector teams: Draw up the sub-deliverables (results): interpretations, definitions, and designation of (possible) sources to fill the data scheme. Where necessary, involve chain partners from the relevant industries and economic sectors and/or independent experts.
Want to know more about ESG standards, sectors and the data catalogue?
Would you like to know more about the path to a single ESG Data definition catalogue? Then keep an eye on our site. In four parts, we will keep you informed of the progress in the coming months.
Also read: Update program ESG-Data definition catalogue.