Ethical Performance
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US insurers fail to make the CSR grade

June 2007

American businesses are conspicuous by their absence from the upper reaches of a new sustainability ranking of the world’s 43 largest insurance companies.

Most of the top places in the ranking by the Munich-based oekom rating agency are occupied by European and Japanese insurance companies. No US insurer made it onto oekom’s ‘recommended list’ for investment, despite accounting for almost a quarter of those assessed. Among those deemed unsuitable for recommendation were American International Group (AIG), MetLife, Prudential Financial and Allstate.

According to oekom senior analyst Dietrich Wild, all the US companies reviewed failed to demonstrate ‘even a minimum level of transparency’, thereby scoring poorly across the board.

Two UK-based companies – Friends Provident and Legal & General Group – headed the ranking, followed by the Norwegian insurer Storebrand. They did well primarily because they offer staff a good working environment and equality of opportunity, oekom says.

On climate change, oekom claims that in their role as institutional investors, ‘only a few insurers take account of whether or not securities issuers are implementing climate protection measures’.

It found ‘very little’ evidence of companies taking account of climate change in their operations. Most did not monitor their energy use, and the average score for eco-efficiency was very low. However, Legal & General, Swiss Re and Allianz Group stood out as examples of best practice in this area. In its latest submission to the Carbon Disclosure Project, AIG estimated its global utility expenditure in 2005 ‘at less than one tenth of one per cent of gross revenues’.

oekom provides research to 60 investment funds with a total value of €4.5billion (£3bn, $6bn).

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