Global broker and consulting firm Aon has committed to becoming a net-zero carbon emissions producer by the end of the decade as it becomes the latest industry heavyweight to unveil a range of initiatives designed to have a greater positive impact on society.
In a statement today that coincided with the release of the firm’s 2020 Impact Report, CEO Greg Case said: “I am proud to announce that Aon is committing to net-zero carbon emissions by 2030.
“We believe this is a necessary step to take as a global corporate citizen to ensure we are doing our part to reduce our carbon footprint and help mitigate the significant and catastrophic impacts of climate change.
“Since 2015, we’ve reduced our greenhouse gas emissions by 60 percent, but we recognise there is much more work to be done to have a lasting impact,” he added.
Case said that Aon will set science-based targets and adopt “achievable objectives”, setting out plans focused on sustainable sourcing, energy efficiency, business travel and renewable energy.
Taking those actions will enable the global intermediary to be more effective, efficient and resilient, he added.
“We have long been committed to best practices internally and our firm will continue to work with clients to help them identify, understand and mitigate key environmental, social and governance risks to navigate volatility and drive innovation,” said the executive.
“This is just a first step for us, but a very significant one. We believe it is in the best interests of our colleagues, clients and communities that we make this commitment, and we will continue to share our progress toward this goal,” he concluded.
The commitment will see Aon focus on continuing its sustainable sourcing strategy, driving energy efficiency across its real estate portfolio and technology, reducing business travel and transitioning to renewable energy.
In its 90-page report, Aon looked back at 2020 as an unprecedented year when every company in the world was required to stand up and address a single risk “at the same time in a way they never had before” as a result of Covid-19.
Case said the firm had responded to the challenges of the pandemic with a show of resilience, creating innovative new solutions designed to support colleagues, clients and communities as it endeavours to meet the rapidly shifting dynamics of a “significantly complex world”.
“By rejecting the idea that the world has to accept this landscape as a ‘new normal’ – we believe there is an opportunity to chart a New Better path and emerge stronger as a firm and as a society,” he added.
The approach is Aon’s call to develop new ways of working together, to view challenges as opportunities and to help each other and clients become more flexible, adaptive and resilient, the Aon CEO continued.
Rather than halting its efforts to create solutions that drive differentiated outcomes for clients, the events of 2020 had made the firm more committed to making progress.
A key area of focus for Aon – as it is increasingly for the wider insurance industry – is around environmental, social and governance (ESG).
“In order to help clients manage risk and overcome volatility, it’s critical that Aon demonstrates leadership by the way we manage these challenges as a firm.
“By implementing ESG best practices to promote corporate resiliency and sustainability within our own walls, we are better prepared to help clients prioritise and improve their ESG needs and agendas as well,” the Aon CEO continued in his introduction to the report.
Last year Aon established an internal ESG committee aimed at increasing its focus and global coordination on identifying and mitigating ESG risks and disclosing its practices and policies in those areas.
“Aon is committed to implementing ESG best practices internally to promote corporate resiliency and sustainability and to prepare for the ongoing challenge we face in relation to emerging and long-tail risks. Moreover, we are committed to helping our clients do the same,” said the report.
The ESG committee will play a role in delivering the 2030 target for net-zero emissions by helping drive sustainable and environmentally conscious real estate and travel decisions as well as responsible supply-chain management practices, said Aon.
The firm is also committed to the “social” element of ESG, by building diverse and thriving teams with the brightest talent.
“We provide our colleagues with opportunities to grow and resources that support their wellbeing and journey to become the person they want to be in health, home, work and beyond,” the report continued.
A core objective of the ESG committee is to develop a cohesive inclusion and diversity (I&D) strategy in partnership with the newly formed I&D sub-committee of Aon’s board of directors and the firm’s Global Inclusive Leadership Council.
“We are also committed to supporting and collaborating with diverse partners from the communities where we live and work, as well as prioritising philanthropic activities,” said Aon.
In the area of “governance”, the firm said it is committing to acting with integrity and continuing to uphold its risk mitigation and governance practices with input from an “independent and engaged board”, as well as maintaining policies to support company values.
“We have processes in place to help ensure we uphold ethical standards and deliver long-term economic value. The ESG committee partners with teams from across the firm to drive rigorous adherence to business conduct standards and transparency in our operations,” the report stated.
Among client initiatives aimed at fostering ESG was last year’s development by Aon of its ESG Investment Portfolio Dashboard to provide clients with a detailed overview of the ESG integration into their portfolio.
It includes Aon’s proprietary fund-level ESG ratings and commentary, a portfolio-level MSCI ESG snapshot, carbon intensity data and an ESG modeller allowing clients to see how changes to allocations impact carbon intensity and ESG exposure.
The Insurer comment
Yet more evidence that 2021 is “The year of ESG”. We track how industry players – both carriers and intermediaries – are increasingly regarding these themes as critical to business, clients and operations in our The Insurer TV programme, which can be accessed here.
With the global COP26 conference taking place in Scotland this November, expect more commitments and announcements from the industry’s leading firms to be unveiled before then…