Our environmental priorities
Our overall environmental goals are to support the transition to net zero while supporting insurance markets in providing protection to those exposed to the effects of climate change.
Our priorities are consistent with the Principles for Sustainable Insurance, to which we became a signatory in 2022.
"For year-end 2022, we produced our first ESG Report. By making annual public disclosures on ESG matters, my belief is that by explaining what we do, we will encourage others to take similar steps, such that as an industry and as a community we can work toward a more sustainable economy and world."Andrew Smith Chief Risk & Sustainability Officer
Provide protection against the impact of climate change
As a reinsurer, Conduit Re deploys its capital to provide protection to policyholders (other (re)insurance companies) from a range of natural and man-made risks to generate a financial return for its shareholders. As a company we want to match reinsurance capital to insurable risk and in doing so support protection to individuals impacted by climate change and other perils. By its nature, the (re)insurance industry is inherently exposed to climate-related risk through the potential for increased frequency and severity of climate-related claims. Hence, it is in our commercial interest to support activities that slow or reverse climate change and/or protect against its impact.
Our first environmental priority is therefore to provide protection against the impact of climate change, both directly and indirectly. As a company we must do this in a way that is sustainable and compatible with the interests of our investors and in accordance with our risk appetite.
While many classes of business are exposed to climate change (see our Annual Report and Accounts for details of how we manage our exposure to climate risk) the most direct link is to property catastrophe business. As part of the growth of a balanced portfolio we expect to grow our premiums related to property catastrophe business at a time when some peers are shying away from it.
For more details of our underwriting capabilities see Our Business.
Protect the environment
This is achieved by taking a variety of actions across our underwriting, investments and operations, and by participating in industry debate and collaborating. Context is important, and as a relatively small treaty reinsurer, remote from the underlying insurance contracts, our greatest impact is not through simply excluding classes of business but by taking steps in those areas where we believe we can have a positive impact.
The area where we have the greatest immediate control over our environmental impact is in our own operations. This has been our priority while we establish the business. This has both the direct impact, but also impact in communicating and instilling our intent in our people, and in attracting the right people. Our supply chain is a logical next step, and this has been an increasing focus.
Our underwriting and investment portfolios are where, over time, we can have the greatest impact, but where achieving that impact is more difficult. Our investment portfolio is selected with the application of ESG factors. In 2022, we added greater focus to our guidelines to avoid certain environmentally harmful sectors. Similarly in underwriting, while we do not write any direct insurance of environmentally harmful practices, we have tightened our guidelines and restrictions to avoid or contain our exposures, while also recognising the needs of transitioning industries.
Please refer to our latest ESG report for our ESG underwriting and investment guidelines.
So, what does this mean for our practical priorities:
Our first environmental goal is to be operationally carbon neutral. We have sought to minimise our carbon footprint through the choices we have made and by purchasing offsets for the emissions we could not reasonably avoid.
Conduit Re’s organisational design is very much compatible with being a low-carbon company. Our reinsurance operations are based in a single location, significantly limiting the need for travel. Further, we made environmentally conscious choices regarding the office building we selected, policies we have and equipment we use to keep our footprint contained.
During 2022 we estimated our carbon emissions for the first five years of operation and carefully selected offsets to exceed this. We believe that carefully selected carbon offsets, with direct investment into new, environmentally positive projects are an important tool in the path to net zero and to achieving social and equity benefits. Our emissions were based on the electricity supplied to our offices, business travel (transport and accommodation) and staff commuting.
Since becoming an inaugural signatory to the Sustainable Markets Initiative: Global Pledge for Sustainable Supply Chains, we also calculate and disclose emissions in our supply chain, as defined in the guidance to the Pledge, to the extent we reasonably can using accepted methodologies. See our Annual Report and Accounts 2022, ESG Report or ClimateWise Report for details of our carbon emissions.
Being based in Bermuda we care passionately for the beautiful island we call home. Our initial focus has been, via the Conduit Foundation, on supporting charitable organisations that protect or restore nature’s balance.
More recently, attention has turned to reducing our negative impact by becoming a Beyond Plastic Bermuda Champion and removing single use plastic from common usage in our office.
The Beyond Plastic programme is important to us for multiple reasons. First, the direct reduction in plastic will reduce waste and plastic pollution. It also reduces green-house gas emissions and protects against the health risks of plastics entering the bodies of people and animals. Secondly, and importantly, it emphasises to our staff, many of whom have joined since we made conscious decisions around the avoidance of plastic water bottles and single use coffee apparatus, that avoiding single use plastic is part of being a responsible company. Beyond signing-up we have also run an educational session for employees and their families. We also promote recycling and composting with office collection points.