“These commitments are of special relevance (…) as we are the spearhead of our Group in the coverage of large industrial risks worldwide”.
We are at a time of historical change. An urgent context in which we have the unique opportunity to collaborate to face environmental challenges. The objective is to keep global warming at 1.5 °C above pre-industrial levels, a threshold that scientists believe is necessary to avoid the worst impacts of climate change and that, if not remedied, will produce catastrophic effects for people and ecosystems.
To justify this alarming message, we must refer to the scientific consensus on contemporary climate change caused by humankind, expressed as the proportion of the total publications on the subject worldwide that exceeds 99% of the scientific literature as a whole, peer reviewed, including skeptical papers.
This anthropogenic effect is directly related to the production of Greenhouse Gases (GHG) and, for this reason, a rapid decrease of these emissions is needed at a global level.
To measure this footprint, a protocol for calculating greenhouse gas emissions is established, which are classified into three groups or “scopes” for all companies that must report it:
- Scope 1 refers to its direct emissions originating from sources owned or controlled by the company.
- Scope 2 covers indirect emissions from the generation of electricity, steam, heating and cooling purchased and/or consumed by the reporting company.
- And Scope 3 includes all other indirect emissions that occur in its value chain and are not under its direct control. In the case of MAPFRE, the main value chain of our activity logically includes the underwriting of insurance premiums for greenhouse gas-producing clients and the financial investments made in entities that also produce greenhouse gases.
Scope 3 emissions are, in many non-producing companies, those that have the greatest impact on their own computable footprint and provide very valuable information in determining the strategies to follow to generate a competitive advantage. Reinsurers, together with the rest of the finance sector, are identified as one of the main promoters with the capacity to favor and promote the necessary energy transition of the productive sectors currently considered to be the most polluting.
MAPFRE Global Risks’s Sustainability Plan
MAPFRE, as a responsible and committed company, has its own Sustainability Plan that contains the Group’s environmental commitments regarding underwriting and investment.
Thus, MAPFRE confirms its strategy in favor of the transition towards a low-carbon economy, accompanying clients in their decarbonization and energy transition processes.
These commitments, although they are applicable to all Group entities from 2023, for obvious reasons are of special relevance in the development of the insurance activity of the Global Risks Unit, as we are the spearhead of our Group in the coverage of large industrial risks worldwide, which is why the Group’s Underwriting Policy Committee will monitor compliance1.
And how do these commitments impact the MAPFRE Global Risks business?
MAPFRE Global Risks will not insure coal, gas and oil companies that do not commit to an energy transition plan2 to maintain global warming at around 1.5 ⁰C.
The details of the scope of the commitments in force that affect the companies that operate in the fields of coal, gas and oil can be consulted below:
Environmental commitments in investment and underwriting
MAPFRE Global Risks and the added value for its insured parties
Beyond the inexcusable compliance with the stated commitments, it is MAPFRE Global Risks’ vocation to accompany and help our insured parties in their energy transition process, through proactive collaboration that may include making our know-how available to them and the experience acquired, worldwide, on successful practices in the various sectors of activity. An example of the latter is the extensive activity that MAPFRE Global Risks has been carrying out for years: insuring renewable energy sources. Experience, which can be extremely useful for new operators who are now starting to use it.
ESG analysis during the MAPFRE Global Risks underwriting process
Additionally, MAPFRE’s Global Risk Unit has implemented an internal ESG (Environmental, Social and Governance) risk assessment model that is incorporated into the underwriting process itself, in accordance with the MGR 2023 Technical Management Standards. The result of this analysis (ESG rating) is considered in decision-making and in the authorization, levels required for each operation. In this sense, it is essential that clients submit, within the contracting information (renewal/prospect), information on sustainability and energy transition, for Operations and Underwriting’s detailed analysis. Periodically, the ESG ratings of the entire portfolio are updated.
Thus, MAPFRE Global Risks, through an active commitment to its policyholders, helping them in their energy transformation and the implementation of good environmental practices, contributes to the development of a more sustainable and caring society.
NOTES:
- SCOPE: The MAPFRE Group has established that these environmental commitments apply to all Industrial Risk insurance operations (Damage, Liability, Transport and Construction). The environmental commitments adopted by the MAPFRE Group are applicable to the renewal of contracts and new contracts.
- Definition according to the National Integrated Energy and Climate Plan (PNIEC) 2021-2030. Ministry for Ecological Transition and Demographic Challenge (Spain).
César López
Underwriting Deputy Manager.
Energy and Construction Department – Oil and Gas
MAPFRE Global Risks
