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 a range of established carbon offsetting programmes. Our global emissions are currently being offset through a pioneering collaboration with Carbon Footprint Ltd in the Great Rift Valley in Kenya, which uses carbon finance to fund tree planting and support the developing community. We review our collaborations every year and in 2016 offset 7,383 tonnes in carbon emissions through this scheme. 

About the Great Rift Valley project in Kenya 

The project contributes to reforestation in the Kikuyu escarpment forest of the Great Rift Valley in Kenya. Over the years, deforestation and degradation has occurred as a result of charcoal burning, logging and over-grazing. This impacts the environment through the drying of springs and steams, soil erosion and the emigration of wildlife/birds. Families are required to travel greater distances in search for fuel wood and water, exposing them to dangers, and the loss of flora/fauna has a negative impact on the tourism trade, causing related income to dwindle.

This project sources trees from local nurseries established in the community and neighbouring community (including those grown by a local women’s group and a farmer field school). It provides much needed income for women, as well as families affected by HIV. As well as the obvious environmental improvements, the benefits to the local community are substantial. The planting teams generate income from the work they do for the project, the trees are purchased from local nurseries and even promotional t-shirts for customer photography are produced locally.

Women are a big part of the project. The majority of the planting team is women. They now have improved livelihoods as well as diversified incomes in terms of milking cows, indigenous eggs for sale and fruit trees. As a result of the project, they have been able to pay for schooling for their children, and most importantly, they are now not desperately dependent on their husbands or relatives. The women are now staunch environmental educationists especially to their families and fellow women in self-help groups that they are now empowered to join.

The project activity brings a number of benefits to sustainable development including:

Environmental benefits

  • Conservation of water catchment areas, providing water/food security.
  • Conservation of existing habitats and creation of new habitats for birds, butterflies and other wildlife.
  • The trees assist in the prevention and control of soil erosion.
  • Reduced risk of landslides and flooding.

Social and economic impacts

  • Provision of permanent employment, reducing poverty – especially for women.
  • Sale of fruit will help the community earn extra income.
  • Nutritional benefit from the fruit trees that are planted.
  • Improves livelihood and quality of life.
  • Provides alternative income to destructive forest activities, thereby changing attitudes towards the forest.

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...