Ch 1 – Overview
Introductory articles on emerging exposures, risk mitigation
and insurance risk transfer for clients of Omnisure.
A compendium of introductory ESG articles on emerging exposures, risk mitigation and
insurance risk transfer for clients of Omnisure with claims examples.
Martin Birch – March 2022
Chapter 1. Overview, Lexicon, Disclaimer & Acknowledgments
This is a website blog containing brief summaries of ESG resources. The resources are available in a compendium of articles contained in a Foundation Document1 entitled “ESG Discussions – Introductory articles on emerging exposures, risk mitigation and insurance risk transfer for clients of Omnisure”. You can view the brief summaries of the full text document as they are released (commencing April 2022) on our blog
Some chapters in the Foundation Document provide a broad overview of ESG. Others are more topic specific including emerging ESG risks & opportunities, such mandatory climate risk disclosures, duty of care, directors’ obligation under existing Australian laws, disputes & arbitration, regulatory approach etc.
Our main motivation for this initiative is Chapter 13 which focuses on the Agricultural & Impact Investment Funds landscape2 with Omnisure launching a unique insurance broking service for investment fund managers.
Prudentially regulated entities in the financial services sector are focussing on the challenges that come with navigating climate risks, particularly as the relate to compliance with existing duties. This document provides a conceptual framework and ESG reference document (of generally publicly available material) presented in the form of a booklet, ordered by chapters number. It is arranged in sequence to assist readers according to their level of familiarity with Environmental Social and Governance Issues (“ESG”), their interest (‘general orientation’ vs ‘specific aspects’ of ESG topics) and their time available to commit to one or more topics – as set out below.
The ‘Paris Agreement’ targets a global economy that is net zero greenhouse gas emissions by 2050. That agreement will re-shape the global economy in three decades. ESG growth is accelerating. Several initiatives are underway in Australia related to climate change, emissions reduction and decarbonisation. Calls are growing for a global standard in corporate reporting3. Changes are underway. For example the Queensland Rural and Industry development Authority Sustainability is offering loans that can help primary producers invest in the latest infrastructure to create a viable future for farming businesses, including activities that improve farming system sustainability, natural resource sustainability and financial sustainability.4 The Commonwealth Bank (“CBA”) boasts that is made available Australia’s first sustainability linked loan for Agriculture.5 Stockyard, one of Australia’s largest family-owned feedlots is on track to make big savings on bank interest costs after setting itself a list of sustainable business goals, including solar powering all its electricity needs, slashing beef herd methane emissions and investing in electric vehicles.6
The Omnisure compendium of articles bring these risks in to focus and investigate directors’ and officer bearer obligations, highlighting the role of risk transfer in the ESG landscape. We investigate the role of insurance for investment fund managers ultimately viewed through an agricultural lens. The articles could be interest to those that seek to identify and mitigate risks to their operations posed by ESG factors, notably those exposures that can transferred through insurance. You’re invited to scroll through the chapters according to topics of interest to you – or you can access the full text of the original Foundation Document by contacting us.
LEXICON
Our Foundation Document includes definitions of some key terms and expressions used in the ESG domain. Whilst not exhaustive they could be of benefit to readers not familiar with ESG discussions. For example we include clarification into terms such as:
- Australian Carbon Credit Units (ACCUs)
- Environmental, human, and social capital
- Emissions Reduction Fund (ERF)
- Emissions ‘scopes’ – 1, 2 and 3
- European Commissions’ Financial Reporting Advisory Group (EFRAG)
- Global Impact Investing Network (GIIN)
- Impact investing … and more.
This compendium of articles is introductory in nature, does not constitute insurance or legal advice. Information has been obtained from credible publicly available sources believed to be correct at the date of publication thereof. Neither the Author nor Omnisure accept any Liability howsoever arising, in relation to the compendium of articles.
This series of articles draws heavily on published documents. Whilst linking various articles together to form a coherent reference document, the ‘author’ in large measure is not the original drafter of most of the content of this compendium. Acknowledgement is made throughout the series to sources quoted or used, but it would be remiss not to state the substantive reference work of Corrs Chambers Westgarth in their on-line INSIGHTS publications, and the on-line ESG resources of Minter Ellison Lawyers. Where relevant we commend these sources to readers interested in the original text of various chapters of this publication.
1 Our Foundation Document is the original full text version of “ESG Discussions – Introductory articles on emerging exposures, risk mitigation & insurance risk transfer” for clients of Omnisure, compiled by Martin Birch. Register on our website for a full copy.
2 The articles are a compendium of publicly available information. They do not necessarily represent the views of Omnisure or the author in every respect, do not constitute insurance advice and should not be relied upon as such unless/until we are engaged in that capacity. Information has been obtained from external sources, and whilst we have no reason to believe their accuracy or authenticity neither the author nor Omnisure can guarantee the accuracy or currency of such information. You should always obtain professional insurance and/or appropriate legal advice based on your specific circumstances before taking any action relating to matters covered by the articles.
3 https://envizi.com/blog/tcfd-framework-what-it-is-and-why-it-matters/
4 https://www.qrida.qld.gov.au/program/sustainability-loan
5 https://www.commbank.com.au/articles/newsroom/2021/07/sustainability-linked-loan-for-agriculture.html
6 https://www.farmonline.com.au/story/7352926/cheaper-cba-loans-for-farms-with-real-sustainability-agenda/
Please contact Martin Birch for a copy of the full-text Foundation Document at martin.birch@omnisure.com.au
