Sustainability pressures mount as global regulations tighten

As businesses across Europe and globally face mounting demands from regulators, sustainability has taken centre stage, according to a panel of experts at FERMA 2024 in Madrid.

Sustainability now plays a critical role in shaping corporate responsibility in both society and the economy. The panel, leading the session entitled “Transition to a Sustainable Insurance Sector”, explored how the risk function can ensure its strategic role in driving the transition to a more sustainable insurance market.

The discussion was introduced by Lea Lelijveld van Cingelshouck of NN Re in the Netherlands and featured industry figures Simon Braaksma from Royal Philips in the Netherlands, Andiara Fleischer from Crawford & Company in Norway, and Michele Francioni from MSC Cruises in Switzerland. 

Facing the sustainability tipping point

Braaksma pointed out that companies are rapidly approaching a tipping point. Businesses now need to report a lot of information on their products, including what materials are used, their environmental impact, and how much carbon is emitted during production. The level of transparency required is unprecedented.

The panel emphasised that companies must prepare for both current and upcoming regulations in a rapidly evolving regulatory landscape. Businesses need to get their act together as the volume of required information continues to grow.

Francioni highlighted MSC Cruises’ approach, explaining that while Swiss companies aren’t bound by EU sustainability regulations, MSC voluntarily disclosed its sustainability data as it is a global firm. He noted the extensive reporting that is undertaken, from the manufacture of its ships to the emissions that it produces. 

Although ships have become more efficient, Francioni pointed out that owning more ships naturally leads to higher emissions. Therefore, climate and emissions plans must be integral to every company’s strategy. 

A plan is needed for each company, the panel stressed. Upstream and downstream information is also required, which means that a huge amount of information needs to be compiled and released. 

The panel shared that there are now some ambitious goals to manage climate change in the European Union and other places. 

Fleischer brought a unique perspective from Crawford & Company, explaining how the firm’s “repair, don’t replace” ethos helps reduce its carbon footprint by extending the life cycle of equipment.

The panel also discussed the importance of sharing data, but pointed out that there is always the old danger of garbage in, garbage out. Not all suppliers will have all the information they need. But, the biggest suppliers will have a better idea than smaller ones. 

Fines can be imposed on companies that fail to disclose their emissions, the panel warned. While smaller companies may escape the financial penalties, reputational damage can be just as costly, especially as sustainability becomes a core part of public perception.

Finally, the panel underscored that immediate action is crucial. With increasing global regulations and a drive for extreme transparency, companies must be ready for a future where sustainable practices and transparent reporting are no longer optional but expected. 

FERMA Forum Today is in partnership with Captive Review, part of Newton Media.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.