Environment

The insurance industry is at the heart of the global economy and touches every aspect of life. We respond to many of the risks faced by our customers and share the same challenges.

Climate change is one such challenge. Its effects have a real and relevant impact on our core business of insurance and reinsurance. Increased frequency and severity of major weather events mean that climate change is increasing the risks and costs of insurance, and is a risk to the value of our investments.

As a business with a long-term outlook, it’s important we play our part in the debate on how to mitigate the impact of climate change on the global economy.

We recognise that the most effective way to engage with policymakers, customers and suppliers on climate issues is by acting at an industry level. That’s why we’re working together with others in our sector to do our bit.

We’re a founding member of ClimateWise, which aims to leverage insurers' collective expertise to better understand, communicate and act on the risks associated with climate change and work closely with Lloyd’s and the Association of British Insurers (ABI).

Climatewise logo

Tracking our progress

Hiscox is independently assessed against a commitment to ClimateWise’s six key principles: risk analysis, public policy, influencing our customers, investment strategies, managing our own impact and reporting on our direct emissions. These principles provide a framework for insurance companies to set out how they will build climate change into their business operations. Our annual Climate report tracks and records the progress we’re making and our engagement with the ClimateWise programme.

More information on ClimateWise and the work Hiscox is doing here is available at www.climatewise.org.uk (external link).

Supporting our customers

As well as working to minimise our direct emissions, we actively seek to identify new products and services to support our customers in adapting to the effects of climate change. This includes flood, where we participate in the UK’s Flood Re scheme, and our award-winning US FloodPlus product, both of which are now protecting more homeowners at risk of flooding who otherwise would have had no cover or not enough cover.

Many of the risks we underwrite are impacted by climate variability so it’s vital we understand as much as possible about climate risk, and we’re at the forefront of supporting internal and external research on climate, weather and catastrophe patterns.

What does the future hold for natural catastrophes? We’ve got teams of people working on modeling those scenarios.

The flood threat

Find out how our FloodXtra product is broadening consumer choice for flood insurance in the US

London Market Looks Ahead Report

Helping build resilience across our industry

In 2016-17, Hiscox led a consortium of London insurance market organisations and associated entities in an exercise to simulate a serious disaster resulting in extraordinary global insurance losses of around US$200 billion. The aim was to test how the world’s pre-eminent insurance market would respond in a worst-case scenario catastrophe. The events chosen reflect the changing nature of risk; a highly-destructive hurricane, an unprecedented cyber event, one of the largest stock market declines, and a major reinsurer default with consequent delays in reinsurance payments. We published the results and recommendations for improving industry resilience in our white paper.

How we manage and reduce our direct impact on the environment

Hiscox is committed to reducing the environmental impact of our business. By 2020, we aim to complete a 15% real-term reduction in our Scope 1, 2 and 3 carbon emissions per full-time equivalent (FTE), relative to 2014, and we are already ahead of target. The table below shows the Group’s global carbon emissions year-on-year since 2014.

Carbon footprint per FTE has fallen for the fourth consecutive year, down 4.6% year-on-year.

Our global emissions
  Year 2014 Year 2015

Year 2016*

Year 2017
Scope 1 ‒ company car use, on-site gas combustion and refrigerant loss 446 590 612 742
Scope 2 ‒ purchased electricity 1,916 2,113 2,175 1,889
Total (scope 1 and 2) 2,362 2,703 2,787 2,631

Tonnes CO2e per FTE (scope 1 and 2)

1.20 1.20 1.14 0.97
Scope 3 ‒ air, rail and personal car business travel 4,905 4,538 4,596 5,151
Total (all scopes 1,2 and 3) 7,269 7,241 7,383 7,782
Tonnes CO2e per FTE (all scopes 1, 2 and 3) 3.68 3.22 3.02 2.88
*The 2016 baseline has been re-stated. This is a result of more accurate actual electricity data available where estimates were previously used: Bordeaux, Cologne, Hamburg, Munich and Dublin.

We believe in identifying, then minimising the environmental impact of our business activities, and seek to reduce the amount of waste our activities produce, and the amount of resources we consume. As well as our commitment to reducing our carbon footprint, we want our business to operate more sustainably. This includes measuring our use of water, energy and other products in order to reduce consumption over time; buying sustainably sourced or energy-efficient products where we can; and minimising waste by recycling products where we can. We also encourage our people to get involved to help us do our bit, whether that’s a team beach clean in Bermuda or reducing travel between our offices by making VCs an easy and efficient alternative for meetings.  

We’re committed to being a carbon neutral business

Our commitment to responsible business practices is reflected in our carbon management plan which is designed to reduce the emissions of our global operations and to remain carbon neutral. Our Group operations have been carbon neutral since 2014, offsetting the emissions we could not reduce through award-winning climate and sustainable development experts, ClimateCare. Hiscox works with ClimateCare to support a world leading carbon offset project which not only offsets our carbon footprint, but improves life for families in Western Kenya by providing them with safe drinking water.  

About the LifeStraw Carbon for Water project
The project provides simple gravity-fed water filters for 4.5 million people in Western Kenya, minimising exposure to waterborne diseases. This project also cuts carbon emissions by reducing the need to boil water to make it safe to drink. Working in collaboration with the Ministry of Public Health and Sanitation in Kenya, this project uses carbon finance to fund household level water purification. LifeStraw Family water filters have been distributed to over four million families. These gravity-fed filters require no electricity or consumables and remove the need to boil water in order to make it safe to drink. LifeStraw Carbon for Water has won a host of awards acknowledging its innovation and impact. It was selected by the United Nations as a ‘lighthouse activity’, which address how public/private partnerships can provide social and economic benefits to the urban poor, while effectively tackling climate change.

Key benefits

  • Safe drinking water to four million people – reducing risks of waterborne diseases like typhoid and cholera.
  • Tackling climate change at scale – the project has cut more than 1.1 million tonnes a year.
  • Reducing need for firewood – helping prevent deforestation and reduce the time spent on collecting firewood, which is often the responsibility of women and girls.
  • Creating local jobs – 4,000 health educators were employed during the first campaign and 32 repair and replacement service centres have been established, creating 46 full-time jobs.

Why ClimateCare?
Climate and sustainable development experts ClimateCare work with businesses and governments to deliver positive impacts at scale. Its award-winning Climate+Care projects are designed to both cut carbon and improve lives. So far, with support from companies like Hiscox, it has cut 20.6 million tonnes of global carbon emissions and at the same time improved life for 16.5 million people. ClimateCare, is one of the UK’s founding B Corps, a Queen’s Award for Enterprise winner and has been recognised four years running as Best Project Developer Public Health by Environmental Finance. See www.climatecare.org (external link)  for further information.  

Reporting and policies

Our latest reports, policies and disclosures on environmental, sustainability and social governance issues.

Our Report and Accounts outline our approach to risk management, including our views on social governance and environmental sustainability.

Our annual climate report tracks our progress against climate change issues.

Our environmental sustainability policy sets out the standards we aim to achieve throughout Hiscox Group activities.

Read more about what we’re doing...