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
  2015 2016 2017 2018
Scope 1 ‒ company car use, on-site gas combustion and refrigerant loss 590 612 742 750
Scope 2 ‒ purchased electricity 2,113 2,175 1,889 1,582
Total (scope 1 and 2) 2,703 2,787 2,631 2,332

Tonnes CO2e per FTE (scope 1 and 2)

1.20 1.14 0.97 0.76
Scope 3 ‒ air, rail and personal car business travel 4,538 4,596 5,151 6,865
Total (all scopes 1,2 and 3) 7,241 7,383 7,782 9,198
Tonnes CO2e per FTE (all scopes 1, 2 and 3) 3.22 3.02 2.88 2.98
Our global emissions are independently verified each year by Carbon Footprint Ltd, a family-owned environmental consultancy.

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 a range of established carbon offsetting programmes. Our global emissions are currently being offset through a collaboration with a wind farm in Texas, USA. We review our collaborations every year and have offset 9,198 tonnes in carbon emissions for 2018 through this scheme. 

About the scheme

The Capricorn Ridge Wind Farm is the first wind power project in the US to create Verified Carbon Standard (VCS) carbon credits. The project is located in west central Texas in Coke County and comprises 75 1.5MW wind turbines with a total capacity of 112.5MW. The turbine towers each have three 77 meter diameter rotor blades. The 75 turbines are capable of producing enough clean, renewable electricity to power over 30,000 homes annually.

The project is developed by NextEra Energy (a leading clean energy provider operating wind, natural gas and solar power plants). The objective of the project is to increase the amount of wind-generated electricity supplied to the Lower Colorado River Authority (LCRA) substation in Coke County, Texas.

Wind energy displaces the need for traditional fossil fuel energy sources thereby reducing greenhouse gas emissions and climate change impact. The Capricorn Ridge Wind Farm also provides local economic benefits in the form of an expanded local tax base and landowner lease payments. Proceeds from the sale of carbon offsets provide the financial incentive for clean energy projects such as the Capricorn Ridge Wind Farm to reach development and fund initial operational costs.

Social and sustainability benefits

The project is contributing to sustainable development:

  • Reduction in emission of Greenhouse Gases
  • Increase the contribution of renewable energy to Texas, USA
  • Encourage industries to contribute to Green Power
  • Additional local employment in windmill operations and maintenance
  • Creates no air or water pollution
  • Allows land to remain in agricultural use

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

Read more about what we’re doing...