Environment

We carefully manage our environmental impact and work with our customers, suppliers and business partners to respond to the changing climate.

This means looking at our operations and how we can reduce waste – water, electricity and other consumption. It also means investing in areas such as research, catastrophe modelling and new technologies that benefit our brokers and customers.

As a business with a long-term outlook, it’s important that 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 play our part.

Climatewise logo

We achieve more together

We’re a founding member of ClimateWise, which aims to leverage insurer’s 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).

Our ESG Executive Sponsor also sits on the ClimateWise Insurance Advisory Council. This group comprises of c-suite executives who work together to strengthen the industry’s response to climate-related risks and inform regulators, policymakers and other stakeholders on how to promote more systematic response to climate change across the financial system.

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

Hiscox climate report 2021

Reporting on our progress

Hiscox is independently assessed against a commitment to each ClimateWise principle: accountability, investment strategies, identifying, understanding and managing climate risk, reducing our environmental impact, informing public policy and supporting climate awareness among our customers.

These six key 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.

What are the odds? It’s what gets us out of bed in the morning.

Many of the risks we underwrite are impacted by climate variability so it’s vital we understand as much as possible about climate risk. We actively invest in research, catastrophe modelling and new technologies that improve our underwriting capabilities so we can provide products our customers can rely on.

Following the devastating California wildfires of 2018, we invested in new research and modelling to further increase our understanding of the risk. By licensing a new risk model for wildfire, and applying our ‘Hiscox view of risk’ we are now able to set premiums more accurately.

The flood threat

In flood, through our participation in the UK’s Flood Re scheme, and our award-winning US FloodPlus product, we’re protecting more homeowners at risk of flooding who otherwise would have had no cover or not enough cover.

Damage caused by escape of water is the biggest driver of home insurance claims globally. We are the first UK insurer to offer a free Leakbot, the smart water leak alarm, to all new and existing buildings insurance customers, helping to prevent escape of water damage before it occurs.

The flood threat

Find out how our FloodXtra product is broadening consumer choice for flood insurance in the U.S.

Industry partnerships that put customer needs first…

Having great relationships with our brokers is important to us, and we look to build strong and lasting partnerships with those that share our values.

Our ‘superb service’ ethos means we take the time to develop a greater understanding of individual customer and brokers’ needs. Hiscox UK and Hiscox London Market have Chartered Insurer status from the Chartered Insurance Institute (CII), which recognises the professionalism and expertise of staff and helps to attract business partners looking to work with high-quality insurers. Across the Group we run annual broker summit events for our broker partners and the rising stars in our businesses.

Savvy use of our own and other investors’ capital means we can absorb risks within our own appetite and also help to shoulder risks beyond it. Our industry partnerships can make big things possible – like creating a $1 billion fine art consortium to enable works to be exhibited all over the world.

 …and build resilience.

In recognition that it had been some time since underwriters, brokers and regulators had experienced a major market turning event, Chairman Robert Childs spearheaded a project to test our resilience. Working with 23 other organisations to simulate a serious disaster, the industry was reminded of its role in responding with speed to complex events – a lesson that came in handy later in 2017 when Hurricanes Harvey, Irma, and Maria hit the USA.

Read our 'London Market Looks Ahead' white paper.

Hiscox Green Team logo

Reducing our environmental impact

We care about the environment and have established a network of employee-led country Green Teams which share a common purpose but whose activities are tailored for each country. Together these teams can collaborate, share ideas and information to improve how we work, then implement new office practices that are not only efficient but environmentally responsible. 

Building on the success of our Green Team in Bermuda, we now have a UK Green Team to help us make positive environmental changes across our UK offices, and we will look to establish other country green teams in 2020. Our UK Green Team is already having a big impact, whether that’s partnering with food-sharing app, OLIO, in London or replacing disposable plastic water bottles with recyclable cans, the team are encouraging us all to make small changes that really add up.

Bulky waste - old sofa and cabinets

One company’s junk is another’s treasure

Our partnership with AnyJunk ensures that for UK claims requiring waste removal, such as a house flood or fire, much of the waste collected avoids going to landfill. Anyjunk use a digital platform to match people who need waste cleared to the nearest available ‘man-with-van’ team, aiming to reduce distances driven by helping local businesses use their existing fleet more effectively.

In 2019, AnyJunk collected 186,000 kgs of rubbish resulting from Hiscox claims, 94.7% of which was reused or recycled.

Thanks to new recycling processes in our York and London offices, less of the waste we generate now ends up in landfill. Although we encourage employees to use re-usable cups, our disposable cups are now recycled by a specialist company which turns the plastic elements into tubing or park benches, and the paper elements are turned back into high quality paper and paper products. We also now collect our plastic milk bottle lids and drinks tops, which go to high street store, Lush, for recycling into waterproof furniture.

Keep Bermuda Beautiful beach clean - photo credit: Anne Hyde

Keeping Bermuda beautiful

Our employees are involved in a number of environmentally responsible initiatives around the world. For example, in Bermuda we work with Keep Bermuda Beautiful, which is the island’s oldest environmental charity. With the help of volunteers, the group carries out monthly neighbourhood clean-ups, in addition to their annual island-wide spring clean in May and marine clean in September.

Through their Adopt an Area initiative, which gives individuals or teams responsibility for a specific piece of the island, Hiscox has its own designated area to take care of, so our Bermuda team work together to hold regular beach clean-ups.

Managing our carbon footprint through new net-zero targets

Getting to net zero is a shared challenge, and we need to play our part in achieving this global goal. As a Group, Hiscox has had stretching Greenhouse Gas (GHG) reduction targets for a number of years but this year we set new targets, using Science Based Targets initiatives (SBTi) methodologies, that align with a 1.5°C net-zero world by 2050.

As a result, we commit to:

  • reducing our Scope 1 and 2 emissions by 50% by 2030, against a 2020 adjusted baseline*;
  • reducing our operational Scope 3 emissions by 25% per FTE by 2030, against a 2020 adjusted baseline*;
  • transitioning our investment portfolios to net-zero GHG emissions by 2050. The aim is that more than 25% of our corporate bond portfolio by invested value will have net-zero or Paris-aligned targets by 2025, and more than 50% by 2030;
  • engaging with our suppliers, brokers and reinsurers on our net-zero targets and on their plans to adopt Paris-aligned climate targets;
  • monitoring emerging standards around underwritten emissions and collaborate across our industry on their development, aligning with best practice in this area as it emerges.

*The 2020 baseline has been adjusted for Covid-19 to ensure it reflects a more normal year with regards to office usage, business travel, etc.

We continue to focus on reducing the emissions we have control over, and to work closely with our partners where that control is shared. Where common standards and methodologies do not yet exist – for example, in measuring and assessing supply chain impacts, and underwritten emissions – we want to help shape the solution.

We continue to focus on managing and minimising our carbon footprint as a Group, and during 2021, our total operational footprint decreased by 36%.

We experienced a year-on-year increase in natural gas usage, driven by staff returning to our offices post-pandemic and better quality data from a number of sites. When it comes to electricity usage, we have benefitted from continued adoption of renewable energy sources.

Business travel emissions, including travel in company-owned vehicles, as well as staff travelling in their own vehicles, has seen a significant drop due to the fact that 2021 was the first full year of post-pandemic travel patterns. We expect to see a rebound in travel emissions as work patterns normalise.

Our global GHG emissions - 2021 emissions and 2020 baseline

Scope

2021 (tCO2e)

2021 (tCO2e)

Year-on-year change
Scope 1 678 615 10%
Scope 2 (market-based) 866 1,111 -22%
Total Scope 1 and 2 1,544 1,726 -11%
Scope 3 (operational) 17,116 27,461 -38%
Total operational footprint 18,660 29,187 -36%
Scope 3 (non-operational) 8,458 7,046 20%
Investments 125,156 135,275 -7%

 

 

*GHG emissions are calculated according to the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition).

Hiscox uses market-based Scope 2 emissions for reporting in line with its new GHG reduction target.

Operational Scope 3 emissions cover operational suppliers (office and other related services), capital purchases, fuel and energy related activities, waste generated in operations, business travel, employee commuting and remote working.

Non-operational Scope 3 emissions are those that do not directly contribute to the emissions associated with daily business activity, including non-operational purchased goods and services and transportation and distribution.

The investment emissions are calculated using the Enterprise Value Including Cash (EVIC-based) method of attributing financed emissions to investors, and calculations use MSCI’s carbon data† as the ultimate source.

Our 2020 operational emissions baseline for business travel has been restated to project pre-Covid travel patterns.

Note some emissions totals may not tally due to rounding.

We continue to focus on reducing the emissions we have control over, and to work closely with our partners where that control is shared.

In addressing our Scope 1 and 2 targets, we are already engaging with our facilities managers across the Group to continue to transition our offices to renewable electricity contracts. Where we have total control over our utility providers, this is easier to do, but where that control is shared, or where it belongs to our landlords, we will petition for change. We are also reassessing our existing use of company cars, which is currently limited to a small fleet in some of our European operations. We are already making progress here, having retired our fleet of company cars in Germany during 2021, and in those areas where it is not possible to eliminate the fleet entirely, we intend to transition to electric vehicles over time.

On operational Scope 3, which is dominated by business travel, we are currently focused on improving the consistency of travel data across the Group to enhance our understanding of both volume and class of travel, to ensure our action plan is appropriately targeted.

Beyond targeted action, we also offset the emissions we could not reduce through an accredited carbon offsetting scheme. Our global emissions are currently offset through a collaboration with a solar project in India. In 2022, we plan to further review and refine our strategy for carbon emissions offsetting, as we look to remain operationally carbon neutral as we have been since 2014.

About the scheme

The renewable energy project involves installation and operation of solar power plants in India with a total installed capacity of 56.25 MW.

The power generated (16.25 MW and 40 MW respectively) at plants in the village of Hoti in Medak, in the state of Telangana and the Sengottai in Virudhunagar in Tamil Nadu, will feed into the state grid.

This will replace anthropogenic emissions of greenhouse gases estimated to be approximately 93,022 tCO2e per year, and will displace an estimated 95,145 MWh/year of electricity from the generation-mix of power plants connected to the Indian grid, currently dominated by thermal/ fossil fuel-based power.

2022 Carbon offsetting certificate

ESG 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.

Our approach to climate issues and the changes taking place in the global risk landscape.

(Re)insurers have a role in ensuring an orderly transition to a low carbon economy and we want to play our part. Hiscox has a Group-wide exclusions policy, effective from 1 January 2022.

Read our latest CDP disclosure.

Read more about what we're doing...