Insurance sector agrees commitments on responsible investing
Agreement signed for international responsible investing in insurance sector.
Today, the insurance sector, civil-society organisations, trade unions, the Minister of Foreign Trade and Development and the Minister of Finance, signed the IRBC Insurance Sector Agreement. The agreement helps to clarify the international chain and thus prevent and tackle such issues as human rights violations, environmental damage, and animal suffering.
Unique agreement in global insurance sector
The Dutch insurance sector currently invests about EUR 500 billion in companies and public authorities, which gives it the ability to influence policy and practice. Insurers have already been operating since 2012 in accordance with the Sustainable Investing Code drawn up by the Dutch Association of Insurers. With the new agreement, Dutch insurers are the first in the world in this sector to enter into a broader and more ambitious agreement that addresses issues relating to the environment and social conditions and also corporate governance (the “ESG” themes). The commitments in the agreement are based on the OECD guidelines for multinational organisations and the UN guidelines for companies and human rights; among other things the agreement also promotes animal rights.
Cooperation to prevent and tackle problems
Agreements on international responsible business conduct (IRBC agreements) are intended to bring about cooperation between the parties involved with a view to preventing and tackling problems within the international chain. Insurers are expected to carry out an effective assessment of the risks and where necessary to adjust their policy accordingly.
In the first year, the parties will initiate joint projects in the field of energy transition and climate change. By collaborating on the projects, they will gain a better understanding of the risks in this field, and action can be taken to tackle them. They will hold one another to account regarding agreed objectives and will work together to find solutions.
The Insurance Sector Agreement is the seventh agreement in the area of International Responsible Business Conduct. Five of the seven were drawn up under the aegis of the Social and Economic Council of the Netherlands (“the Council”). Agreements are in preparation for sectors including pensions, floriculture, agriculture and horticulture, natural stone, and the metallurgical industry. The agreements follow the Council’s advisory report on IRBC (2014).
The IRBC Insurance Sector Agreement has been signed on behalf of all their members by the Dutch Association of Insurers and Zorgverzekeraars Nederland (the umbrella organisation of ten Dutch health insurers). The other signatories were FNV, Natuur & Milieu, World Animal Protection, Amnesty International Nederland, PAX, Oxfam Novib, and Save the Children Nederland. The agreement was also signed by Wopke Hoekstra (Minister of Finance) and Sigrid Kaag (Minister for Foreign Trade and Development Cooperation). The Council is facilitating the agreement and compliance with the agreed commitments.
Council President Mariette Hamer:
The IRBC Insurance Sector Agreement is the result of efforts by parties which, by their nature, do not always find it easy to negotiate with one another. This cooperation will contribute to a fairer, safer and cleaner, world. I am proud that the Council has been able to facilitate this.
Richard Weurding, director Dutch Association of Insurers:
Insurers wish to invest their income from the premiums paid by consumers in a responsible manner. We see ‘responsible’ as having three different aspects: an investment must fit in with a chosen risk profile, it must yield a return, and it must contribute to a sustainable world. The new agreement is an ambitious one for the insurance sector. And it also transcends borders, which is what makes the IRBC agreements so valuable. Because whether it’s climate change, human rights, working conditions, or social injustice that are concerned, within the possibilities open to us we wish to shoulder our responsibility.
Jan Gruiters, director of PAX, had this to say on behalf of the NGOs:
We are pleased with the agreement because it gives insurers the opportunity to tackle responsible investment seriously in the years ahead. With this agreement, they want to deal with abuses affecting people, animals and the environment, and to remedy any negative consequences of investments. If the aims are achieved, insurers can become the frontrunner in the Dutch financial sector.
Tuur Elzinga, vice-chairman of FNV:
With the IRBC agreement for the insurance sector, we are once more taking a step – after the agreement for the banks – to work with the sector to regulate the route that money from the Netherlands can take. This enables us to expressly include the rights and interests of employees in the placement and investment of what is ultimately our money.