African Risk Capacity (ARC) Limited has received the global insurance industry’s top overall environmental, social and governance (ESG) score.
The ESG evaluation by Sustainalytics is a comprehensive assessment of a company’s preparedness to meet future risks and opportunities linked to ESG factors, such as climate change, regulatory risk and reputational issues.
Sustainalytics’ ESG Risk Ratings also provide investors with third-party validation of the company’s sustainability performance, along with insights into why certain ESG issues are considered material for a company and how well it manages those risks.
ARC Limited CEO Lesley Ndlovu says the organisation’s top ESG score in the insurance industry is reflective of the leadership role it plays in helping to mitigate and manage the effects of climate change on the African continent.
“We are proud to have earned the highest ESG ranking in insurance ahead of other prominent global insurance companies. This third-party validation of our business is a great asset for us as we seek to partner with ESG-conscious reinsurers and investors to make a difference on the African continent,” he said.
Established in 2014, ARC Limited provides natural disaster insurance relief to African countries. Most recently, ARC Limited paid out US$2.1m to the Madagascar government to meet the food security needs of more than 600,000 people affected by the devastating drought.
“ARC Limited’s role as a parametric insurer is critically important in building resilience and ensuring a country is able to bounce back swiftly after a natural disaster,” says Ange Chitate, COO ARC Limited.
She adds: “Through this favourable ESG rating, ARC Limited positions itself as an even more attractive partner for like-minded organisations seeking to reach the most vulnerable people in Africa. Through these strong partnerships, we enhance our potential to provide rapid financial support to mitigate the impact of natural disasters.”
ARC Limited’s ESG score was calculated following an independent audit of the company’s business practices and policies. Performed by Sustainalytics, a leading ESG research, ratings and data firm, the assessment focuses considers ESG risks of companies on a scale of 0-100, with 0 indicating the lowest risk.
At 10,3, ARC Limited’s risk rating is the lowest amongst its global peers. No events or policies were identified that may negatively impact stakeholders, the environment or the company’s operations. In terms of ESG risk management, ARC Limited received a strong score of 66.3, indicating the robustness of the company’s ESG programmes, practices and policies.
In particular, ARC scored low or negligible risk ratings terms of Human Capital, Business Ethics, Corporate governance and ESG integration.
Focussing on the management of risks related to skilled labour, as well as labour relations, human capital as a category focusses on a company’s performance in terms of non-discrimination, working hours and minimum wages. In its assessment, Sustainalytics found that ARC employs highly qualified staff with specialised knowledge in finance, insurance, climate change and abilities to forecast climate risk realisation and to structure complex insurance deals.
The report further found, from a business ethics perspective, that ARC Limited has a comprehensive set of policies on ethical issues which addresses definition and prohibition of bribery and corruption, conflicts of interest and fraud. Moreover, the company maintains a detailed anti-money laundering policy.
“The independent endorsement of our ESG efforts and achievements is particularly timely as we raise our profile in the run up to COP26. We will remain firmly focussed on continuing the good work and broad collaboration we have achieved with our partners to solve some of the pressing problems that our continent faces. We all have a role to play,” concluded Mr Ndlovu.
Read the full report here.