Insurers Can Use an ESG Program To Implement New York's New Climate Change Financial Risk Guidance

Locke Lord’s Brittany Batts (Dallas) co-authored an article for New York Law Journal discussing how New York domestic insurers can use ESG framework to develop effective policies and procedures to implement management changes consistent with the guidance ahead of the New York Department of Financial Services’ Aug. 15, 2022, deadline. The authors observe that ESG considerations can provide a tool to ensure that other ESG risks have been identified and managed.

They write, “an effective ESG policy requires an ESG program consisting of clearly defined assessments of risk, metrics, tracking systems, and a management system.” And “[a]n ESG report could provide a mechanism by which insurance companies could disclose its assessment of climate change financial risks and the management steps it has taken to identify and manage such risks, as envisioned in the Final Guidance.”

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