Global advisory, broking and solutions company WTW (NASDAQ: WTW), has introduced an addition to its risk services, ESG Clarified. This is an analytics platform generating new insights to help organisations better understand and address their climate, sustainability and wider ESG risks and exposures.
- WTW adds its new risk analytics solution to the growing suite of services around climate and ESG risk.
- While the ESG ratings market continues to be fragmented and confusing, the plethora of new software and analytics tools being launched is likely to add to market confusion about what to do next.
- WTW is a global leader in risk management but it will be interesting to how the dynamics of climate risk analytics versus ESG analytics plays out in the market.
Ben Fidlow, Global Head of Core Analytics at WTW, said: “ESG Clarified joins several solutions our clients are already using to address ESG risks, including Climate Diagnostic, Risk Tolerance Clarified and D&O Quantified. We are excited to introduce ESG Clarified as an addition to our market-leading analytical solutions suite and we’ve made them all accessible through our Risk Intelligence Quantified (RiskIQ) platform.”
ESG Clarified allows clients to assess exposure and benchmark against competititors
According to Fidlow, ESG Clarified incorporates an extensive set of external and proprietary internal data sources into a self service SaaS analytical solution, allowing clients to analyse and score their ESG exposures in real time to understand financial, human capital, and reputational metrics.
This new platform also enables clients to benchmark their ESG risks against their peers, while also generating reports about their related exposures that can be instrumental in discussions with insurance carriers as they build their risk programs.
Jonathan Weatherly, ESG Global Products Leader at WTW, noted: “Our clients have been asking for a comprehensive analytical platform that uses a broad range of quality data sources to understand ESG risks, prompting WTW to create ESG Clarified. It offers our clients the ability to benchmark their ESG risks for particular business(es) and create unique reports for key audiences.”
Insurance is a growing problem for climate and ESG risk management
There is little question that extreme weather events, exacerbated by climate change, are on the increase and understanding their impact and costs plays a critical role in understanding financial impact.
As events become more extreme and more regular, there is growing concern that some weather related risks will become uninsurable. At the same time, it’s important to understand the implications of the costs associated with extreme weather events, as that may shift the needle in terms of balancing trade-offs between short-term and long-term risks – one that companies need to do in order to make effective plans for the future.
There is an increasing need for insurance for environmental insurance solutions (especially around premises based risk); flood, agriculture and crop insurance; climate tech insurance; engineering and technical underwriting, especially for oil and gas companies looking to transition their business strategies; and of course, the provision of expertise to identify and manage climate related exposures.
At the same time, new technologies and approaches are necessary for addressing climate and ESG risks and traditionally insurance for such untested technologies for use at scale has been difficult to find. Without insurance, few will invest in the much needed changes required by increasingly volatile market conditions. For companies, every tool that helps them understand the risks they face is a critical component of managing the net zero transition.