Raising the bar – ESG leader on insurer’s heritage and why NZIA departures "don't quite matter"

"Individually, companies will still be committed to their own net-zero plans"

Raising the bar – ESG leader on insurer’s heritage and why NZIA departures "don't quite matter"

Insurance News

By Kenneth Araullo

At the heart of the current corporate climate is the environmental, social and governance (ESG) framework, an aspect that’s becoming more and more commonplace as industries at large try to minimise humanity’s negative impact on the planet. However, it’s a framework that’s also being met with significant pushback in relation to the insurance industry, leading to an exodus of members for the United Nations’ Net-Zero Insurance Alliance (NZIA).

Despite these setbacks, there are those who push on with the belief that there is no reason to worry and instead focus on the balls in their own court. For Singlife head of sustainability Chia Ko Wen (pictured), this comes with the rather blunt assessment that these departures from one of the best-known insurance alliances pale in comparison to other, more individualistic aspirations.

“I will frame it this way: yes, NZIA is an alliance, but there are many alliances. There’s also the NZAOA (Net-Zero Asset Owner Alliance) – this is unaffected. I want to say that in the bigger, grander scheme of things, if you count the number of signatories, UN PSI (Principles of Sustainable Insurance) is more important, which has a few hundred, while the UN PRI (Principles of Responsible Investment), which has something like 5,000,” Chia said in conversation with Insurance Business Asia.

With that context in mind, Chia said that the mass exodus “doesn’t quite matter,” mostly because of individual net-zero plans.

“Speaking for Asian insurers, I think many of them are not part of these alliances, yet they continue to set net-zero commitments and have transition plans in place,” he said.

Huge steps in its 18-month existence

Singlife is a relatively young insurer, born from a merger that happened in January last year. However, its age does not matter when it comes to its sustainability initiatives, as Chia called the framework “one of the key pillars” of its business strategy.

“One of the things that we did in the last 18 months, as I mentioned, is that we had signed on to two key frameworks: one is the UN PSI, and more recently (about a month ago), we have also signed on to the UN PRI,” he said.

Citing these moves as a testament to its commitment, Chia touted the fact that Singlife is the first Southeast Asian insurer to sign on to the PRI, while he believes that they are the second in the region to join the PSI.

Another recent sustainability initiative from the Singapore-based firm is rooted in its heritage; Singlife adopted the Orchid Waterfall in the recently opened Bird Paradise, the latest natural attraction from the Mandai Wildlife Group.

“We wanted to partner with them, and we chose the Orchid Waterfall because orchids are our (Singapore) national flower. As part of our heritage, we thought that as a local homegrown company that this identifies very closely to us as well,” Chia said.

Eighteen months may seem like a short span of time for these initiatives to take place, but Chia showed that Singlife has ambitions to be more sustainable as he also announced a recent development with the homegrown firm to help support both the country’s rapidly aging population and the caregivers that support them.

“As a company we have recently also signed a MoU (memorandum of agreement) with an enterprise called SG Assist,” he said. “This is talking about how we can support and empower caregivers in their caregiving journey. Context-wise, as you know, Singapore has a rapidly aging population. The difficulty of families right now is that most of them only have one child, and as such there’s a very heavy burden on the child or the caregiver as their parents, siblings, etc. age. As such, it’s important to make sure that caregivers are also given the support that they need.”

The insurer is also part of the government’s OneMillionTrees movement, as Chia cited the “E” part of ESG as one of its most central focus areas.

“On the topic of environmental, last year, when we launched our sustainability strategy, we also committed to supporting the government’s OneMillionTrees movement. We ourselves committed to plant about 1,500 trees over the course of the next five years. This is to align ourselves with the belief that the government’s green plans are important, and Singlife wants to play an important part in this as well,” Chia said.

Bucking the anti-ESG trend

A recent study from QBE highlighted the fact that there are fewer small and medium-sized enterprises paying attention to ESG initiatives. Chia said that this trend comes from an area of constraint, and that taking into account costs, resources, and capabilities, the sector faces a lot of challenges, even without pandemic effects taken into consideration. That said, there is hope, and it’s all rooted in spreading more awareness.

“I think this question is about raising the awareness of the importance of ESG, climate change, and other issues like these to them in a way that they can understand,” he said. “I think what’s important is that we continue in driving awareness – even as an insurer, we have an important part to play. We can continue to help our suppliers and vendors understand the importance of the framework.”

Another driver that may be viewed by some as forceful is the regulatory changes that are becoming more commonplace in Singapore. Chia said that the country’s financial regulator – Monetary Authority of Singapore (MAS) – has already communicated with businesses their hopes to have industries more in line with international standards such as the Task Force on Climate-Related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB).

“This will cut across the board for every company – it doesn’t matter whether you’re big or small, you will need to comply with these upcoming regulations on reporting,” he said.

Walking it back to the insurer’s role, he said that Singlife and the insurance industry’s influence will be important to being more proactive with ESG initiatives. This comes down to encouragement to look for sustainable measures, a proper code of conduct, and various assessment approaches. In the end, however, it all comes down to “keeping up with the times,” so to speak, as Chia said that there is an ultimatum hanging over the heads of SMEs and MNCs (multinational companies) alike.

“We try to bring this to the whole process so that everyone can be aware that this is important; if you want to do business, you need to put in place some of these ESG practices,” he said.

‘Raising the bar’ for net-zero goals

Chia said Singlife’s sustainable future hinges on a four-pronged, five-letter acronym – RAISE. The R stands for responsible investor, and it’s a guideline that the company relies on in taking care of its customer base’s investments.

“As a life insurer, we hold billions of dollars of policyholders’ funds and assets. We take care of these by investing responsibly into the green economy, in addition to turning the ‘brown’ to green,” he said. “This is the first part of being a responsible investor. In the course of the last year, we have already committed more than SG$500 million into sustainable investments. We still continue to look for opportunities to do so.”

Next is the A, which stands for accelarator of net-zero, and being in-line with the Singapore government’s own moves for a cleaner, greener future.

“We have committed to achieving this goal before 2050 as well, and earlier if possible. We will do it through looking at our investment portfolio, seeing how we can continue to decarbonize it, as well as looking at our own operations. This includes considerations for digitalising our business, going paperless, reducing the use of energy, and considering renewable sources,” Chia said.

Then there’s the I, which stands for innovator for green and good, an approach that will hopefully produce more sustainable offerings across Singlife’s lines of business.

“Green ones, for example, would be our electric vehicles motor insurance launched last year,” Chia said. “We are also the first insurer to partner with regulator’s project called Greenprint where we launched what we call green logistics insurance using use blockchain technology to track the driving habits and patterns of all the logistics drivers; from there, you can come up with a better understanding of how they can cut down on their carbon footprint.”

Finally, the S and the E means sustainability-embedded culture, and this goes toward both the company’s employees and its clients.

“At Singlife, we’ll continue to hear out how our customers view and think about sustainability. Recently, we have conducted our yearly ESG survey, and the results help guide our decisions. For example, just to share two early findings, we found out that more than 50% of the respondents expect brands and insurers to act responsibly, and close to 90% of the respondents say that they are either currently holding or open to purchasing a sustainable financial product in the future,” he said.

With all these measures in place, Chia thinks that Singlife has not only covered all the bases for the insurer’s sustainable future, but also built itself as an example of how initiatives like these come easy when your heritage is founded upon sustainability.

“The easy way to remember it is that we want to ‘raise the bar’ towards a better way to sustainability,” he said.

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