The situation
What impact do you have on nature and biodiversity as an insurer? And in which respects do you actually depend on it? As early as 2023, a.s.r. decided to start reporting on this. Esther Egeter, Corporate Sustainability Manager at a.s.r.: ‘We are the second largest owner of land in the Netherlands, following the Dutch government. We feel a responsibility to pay attention not only to climate change, but also at both our dependence and impact on nature and biodiversity’, she says. And Caithlin Marugg, Corporate Sustainability Manager at a.s.r., adds: ‘With 37,000 hectares of farmland, leased to 2,500 farmers, there are many interfaces with nature. Banks have been working on the topic for some time, while insurers were more on the sidelines.’
Pieter van Dusseldorp, Manager Deloitte: ‘We support financial institutions with identifying and quantifying various ESG risks, including risks related to nature and ecosystems. It’s an as yet unexplored area of the insurance world and being able to develop and apply this expertise in collaboration with a.s.r. proved to be a fascinating journey.’
From qualitative to quantitative
The challenge
The challenge was to create internal support, while a methodology needed to be developed as well. Marugg: ‘Although climate change was a well-known theme, not everyone immediately saw the relevance of ecosystems and biodiversity. The impact on climate change can be captured in indicators such as emissions, but nature is more complex and takes into account dependencies and indirect effects. We explained to our internal stakeholders that already 70% of wildlife is now extinct. Yet the question remained: how does this affect our customers and us as an insurer?’
Jurjen Boog, Director Deloitte, added: ‘We see, for example, that our food production system is both highly dependent on nature and has an impact on it. In addition, natural areas have several useful functions, such as providing flood protection for arable land.’ To gain such insights Deloitte set out to find specific methodologies for the insurance sector, in close collaboration with a.s.r. The aim: to integrate nature-related factors into non-financial reporting for the first time.
Van Dusseldorp: ‘In the first year of us providing support we mainly wanted to understand the relationship between a.s.r. and nature and provide tangible reports on the issue. The approach was still qualitative. This year, we will have to move more towards quantification.’
The solution
Deloitte was invited to support a.s.r.’s working group on nature and biodiversity, in which three of the company’s business units (asset management, real estate and P&C insurance) were represented. A number of focus themes were chosen: agricultural areas were a suitable focal point for real estate, P&C insurance focused on the economic activities of various corporate clients, while asset management’s research focused on the relationship between assets and nature globally.
Egeter: ‘We chose the LEAP methodology: Locate, Evaluate, Assess and Prepare. This approach provides guidance for identifying and assessing nature-related issues. The first step revolves around geographically locating the interfaces between your organisation and nature in your portfolio. We then moved from Locate to Evaluate by linking the dependencies and impacts of a.s.r. clients' main economic activities to ecosystem services provided by nature, using the ENCORE dataset. And finally, we mapped risks and opportunities and set nature-related actions and targets.’
Industry role model
The impact
The approach taken yielded results. Egeter: ‘We proved to be well placed to formulate the disclosures required by the Taskforce for Nature-related Financial Disclosures (TNFD), of which we are an adopter. Moreover, we were able to test our objectives against the Finance for Biodiversity Pledge, of which a.s.r. is a signatory.’ a.s.r.’s 2024 biodiversity report having been recognised as good practice by leading bodies, from DNB to EIOPA (European Insurance and Occupational Pensions Authority). a.s.r.'s approach has thus been acknowledged to be a standard. Marugg: ‘It's great to see that other insurers are now also adopting our approach. Being an industry role model means we can make an impact beyond our own operations.’
Recently, a.s.r. reported under the Corporate Sustainability Reporting Directive (CSRD) for the first time. This included all biodiversity-related information in the sustainability statement of the annual report.
Without taking action, progress will always be out of reach
And Egeter concludes: ‘We are very curious to see what the next annual reports of insurers will look like worldwide. Will they already have integrated nature and biodiversity? No doubt the L, the E and the A will have been filled in here and there by now. But when it comes to that tricky P of Prepare: will they mention any concrete targets? And which ones? We shall see. In any case, we know one thing for sure: sitting idle will not get you there.’
