By Nyasha Mutena
The African Risk Capacity (ARC) Limited has received the global insurance industry’s top overall environmental, social and governance (ESG) score.
The ESG evaluation by Sustainalytics is a comprehensive assessment of a company’s preparedness to meet future risks and opportunities linked to ESG factors, such as climate change, regulatory risk and reputational issues.
ARC Limited CEO, Mr Lesley Ndlovu says the organisation’s top ESG score in the insurance industry is reflective of the leadership role it plays in helping to mitigate and manage the effects of climate change on the African continent.
“We are proud to have earned the highest ESG ranking in insurance ahead of other prominent global insurance companies. This third-party validation of our business is a great asset for us as we seek to partner with ESG-conscious reinsurers and investors to make a difference on the African continent,” says Ndlovu.
Established in 2014, as the commercial subsidiary of the ARC Group, ARC Limited provides natural disaster insurance relief to African countries. Along with its partners, which provide premium support, the insurer has already paid over US$65m to seven countries to provide drought relief and address the economic concerns these countries’ most vulnerable citizens face.
In 2020, ARC made payouts of USD 1.4 million to the Government of Zimbabwe and another US$ 290,288 to UN World Food Programme (WFP), in parametric drought risk insurance payouts to support the extensive drought response efforts in Zimbabwe.
“ARC Limited’s role as a parametric insurer is critically important in building resilience and ensuring a country is able to bounce back swiftly after a natural disaster. But beyond that is our firm focus on providing innovative solutions to small and medium scale farmers through partnerships with aggregators and providing reinsurance to local insurance companies,” says Ange Chitate, COO ARC Limited.
ARC Limited’s ESG score was calculated following an independent audit of the company’s business practices and policies. Performed by Sustainalytics, a leading ESG research, ratings and data firm, the assessment considers risks of companies on a scale of 0-100, with 0 indicating the lowest risk.
At 10,3, ARC Limited’s risk rating is the lowest amongst its global peers. No events or policies were identified that may negatively impact stakeholders, the environment, or the company’s operations. In terms of ESG risk management, ARC Limited received a strong score of 66.3, indicating the robustness of the company’s ESG programmes, practices, and policies.
The independent endorsement is particularly timely as the Group is raising its profile in the run up to COP26.