ESG performance of contractors to ‘be rewarded’

A focus on green space encourages sustainability in high-rise construction. (Photo: DBOX for Bentall Green Oak)

An international insurance broker has collaborated with specialist insurer Beazley to offer construction contractors access to additional professional indemnity (PI) cover based on their environmental, social and governance (ESG) performance.

Insurance broker Marsh said that its ESG Risk Rating is an assessment tool that measures an organisation’s ESG performance, enabling them to identify their sustainability and climate-related risks and opportunities, and gain access to additional insurance market capacity.

Measured against more than ten internationally recognised standards and frameworks, the ESG Risk Rating scores a client’s performance across 19 ESG themes.

Construction contractors that meet the underwriting criteria can qualify for an additional US$1 million in PI cover – 20% more on top of Beazley’s US$5 million maximum line – when they score six or higher on Marsh’s ESG Risk Rating, providing contractors with a tangible reward in return for a positive ESG performance.

Kelly Looney, CEO, UK Construction, Infrastructure & Surety, Marsh Specialty, said, “ESG concerns are a growing area of scrutiny for the global construction sector, and financial institutions are looking to ESG performance as a marker of sustainable and resilient businesses. Despite their best efforts, many contractors are not always able to satisfactorily display their positive ESG goals in a way that allows them to obtain meaningful risk and insurance benefits.”