Ceres: Major U.S. Insurers Make Progress on Climate Disclosures, but Significant Gaps Remain

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Jun 18, 2024, 11:47 ET

Report by Ceres analyzes insurers' alignment with global climate disclosure standards

BOSTON, June 18, 2024 /PRNewswire/ -- A new report released today by Ceres reveals that while major U.S. insurance companies are making progress in disclosing their climate-related risks and strategies, significant gaps and disparities persist across the sector.

The report, Navigating Climate Risks: Progress and Challenges in U.S. Insurance Sector Disclosures, analyzes the disclosure reports from 516 insurance groups, which total more than 1,695 individual companies, submitted to the National Association of Insurance Commissioners' (NAIC) Climate Risk Disclosure Survey for reporting year 2022.

The survey is aligned with the framework developed by the Task Force on Climate-related Financial Disclosures (TCFD), the leading global standard for corporate climate risk disclosure.

Key findings from the report:

94% of insurers reported on risk management processes, 86% on strategy, 81% on governance, but only 29% disclosed metrics and targets related to climate risks.
Just 26% of insurers provided disclosures across all four pillars of the TCFD framework (governance, strategy, risk management, metrics and targets).
A year-over-year comparison showed slight improvement in risk management integration, identifying climate risks and opportunities, and reporting greenhouse gas emissions.
However, insurer disclosures declined in two areas: describing management's role in assessing climate risks and setting targets to manage risks and opportunities.
Adoption of climate scenario analysis is increasing but still low, with only 116 insurance groups (22%) conducting this forward-looking assessment in 2022.

(Editor's note: These and the other measurements only reflect that reporting in these areas is included. It does not reflect that all of them are comprehensive in nature.)

The report highlights best practices from insurers and provides recommendations for companies and regulators, such as:

Establishing common methodologies and scenario analysis frameworks
Setting clear board and management oversight for climate issues
Investing in tools to measure greenhouse gas emissions across all scopes
Engaging constructively on climate policy and regulatory development

In addition to response analysis, Ceres commissioned Manifest Climate, the leading climate intelligence software, to analyze TCFD-alignment using its proprietary methodology and AI-powered platform.

This is Ceres' second annual report analyzing the insurance industry's annual TCFD disclosures. In 2023 Ceres, in partnership with the California Department of Insurance and Manifest Climate, released the first systematic review of U.S. insurance companies' climate risk strategies.

Media Contact: Diane May, [email protected], 617-247-0700 ext. 220

Original Publication

SOURCE Ceres