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AIG's ESG Report and its extensive Climate Risk Management

It's Monday, and with it comes our latest dive into an ESG report. This time, we're shifting our focus from the telecommunications sector to the global insurance giant, AIG.

As always, we're honing in on a distinct aspect of the report that sets it apart. It's worth noting that this report is impressively thorough, delving deep into each topic it covers.

In the realm of insurance, risk is inherent, but what's particularly noteworthy about AIG is their meticulous examination of climate risk. They break it down into three main categories: Physical Risks (both direct and indirect impacts), Transition Risks (related to shifting to a low-carbon economy), and Liability Risks (pertaining to compensation resulting from the aforementioned risks).

Furthermore, they categorize these risks into Long-Term, Medium-Term, and Short-Term, offering a comprehensive perspective. But beyond merely defining these risk categories, AIG has implemented various frameworks and action groups to address them head-on.

These include initiatives like:

  • Risk Enterprise and Solutions (managed internally by their Engineering team)

  • Catastrophe Risk Insights overseen by the R&D Team

  • A Risk Appetite Framework

  • An Emerging Risk Framework

  • A Climate Scenario Modelling.

Once again, this report proves invaluable not only to readers but also to management teams, offering insights into ESG beyond regulatory compliance and serving as a vital tool for safeguarding the business. For those interested in delving deeper, the full report can be accessed through the following link.


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