The Chartered Insurance Institute’s (CII) Broking Community New Generation group has published a new guide outlining environmental, social and governance (ESG) strategies for small and medium-sized (SME) brokers.
The 2022/23 group carried out research to understand how ESG strategies are being implemented, and how they may be adopted by other SME brokers to strengthen their sustainability, accountability and performance.
Results from the group’s research showed that most larger brokers already have an individual or committee within their organisation that is responsible for considering ESG, while this was not the case for SMEs.
The understanding of ESG targets was also not consistent across employees, with both larger firms and more senior staff significantly more likely to have a meaningful understanding of their firms’ targets than those in entry- or intermediate-level roles or at SME brokerages. Less than 25 per cent of entry-level employees felt confident in their understanding of ESG targets, and over a third of those surveyed had no understanding. Only 32 per cent of those at small brokers understood the ESG targets at their firm.
Larger brokers were also shown to be more actively considering diversity in recruitment, with only 11 per cent of respondents disagreeing that their company ‘actively considers diversity when recruiting’, compared with 23 per cent of respondents from small brokers. Within this area, data showed there is still work to be done across the industry, with 22 per cent of research participants feeling that their board is not diverse at all.
After reviewing the findings, the group’s recommendations include:
- Implementing an individual or committee responsible for considering ESG within the business
- Implementing workplace environmental benefits, such as electric car leasing/charging and participation in cycle-to-work schemes
- Avoiding ‘tokenism’, instead focusing on making small and gradual changes that will improve the business culture and practices in the long term
- Working with an external HR adviser to ensure traditional biases are avoided during the recruitment process and interview stage.