REACT Sustainable Finance

One platform to manage your global portfolios in real time

Industry Challenges

Time and tide wait for no one, and the impact of climate change continues to manifest itself across the world. The target of reaching net-zero emissions by 2050, to limit temperature rises to 1.5 degrees C above pre-industrial levels, was set by the UN’s Intergovernmental Panel on Climate Change in 2018, and its most recent report of August 2021 has heightened concern that this target will not be achieved without concerted effort.

The framework to support Sustainable Finance is only now emerging.

The EU led the way with its Sustainable Action Finance Plan. The plan aims to manage the financial risks arising from Climate Change. It proposes shifting capital flows from sectors that contributed to Climate Change towards more sustainable investment designed to achieve net-zero.

Billions of dollars in investments have already been redirected to Sustainable Finance, demonstrating that sustainability will dominate the agenda and decision making for decades to come of investors, asset managers, rating agencies, governments, shareholders, regulators and activist groups. Doing nothing is not an option: now is the time to think globally and act locally.

Why Skytek Satellite Data?

The key to Sustainable Finance, Sustainable Insurance and ESG compliance is data, something that has, until now, not been captured or analysed effectively to meet these new challenges.

Data in reporting is voluntary, which means it is often incomplete, incomparable and outdated by the time it is published. Skytek can change this, providing a unique, neutral, authoritative, consistent and timely source of data as well as analytics, employing its leading proprietary technology and machine learning to support:

  • Climate change-related risks and opportunities assessments
  • Environmental, social and governance (ESG) risks and impacts assessments
  • Monitoring and verification for sustainable financial products
  • ESG Ratings, claims handling and dispute resolution

Environmental, Social and Governance

The bandwidth and complexity of Sustainable Finance have been expanded by demanding that environmental, social and governance ( ESG ) considerations be taken into account when making investment decisions.

This initiative has been given commercial impetus by numerous reports indicating that entities which embed ESG considerations in their decision making are more profitable than those which do not.

Environmental considerations include climate change, carbon emissions, energy use, pollution, natural resource conservation, biodiversity, land contamination, water treatment usage, waste disposal and deforestation and the avoidance, or risk-management, of fire, flood, drought, extreme weather and other natural and man-made events.

Social considerations include board oversight, accountability, human capital, inequality and diversity, health and safety, supply chain labour standards (e.g. modern slavery/child labour and working conditions), ethics, supplier relationships and local community support.

Governance considerations for public and private institutions include board-level oversight, allocation of responsibility and accountability, shareholder rights, anti-corruption, executive remuneration, conflicts of interest, transparency, disclosure, and reporting to ensure social and environmental considerations in the decision-making process.

 Sustainable Insurance and ESG

The UN Environmental Programmes Principles for Sustainable Insurance Initiative and the launch of the ESG Guide for the insurance and reinsurance community provides a global framework for the insurance industry’s response to ESG risks. It specifically tasks the sector with a critical role in preventing, reducing and providing resilience against ESG and Climate Change risk for the benefit of all economic sectors.

ESG risks impact the vast majority of economic sectors and activities traditionally insured by the industry including, property, liability, workers compensation, health and safety, construction and engineering, cyber, directors’ and officers’ liability, financial lines, marine hull and cargo, protection and indemnity, aviation and cargo, supply chain disruption, business interruption and life and health.

ESG is changing the insurance business model from “pay the claim and walk away” to “detect and prevent“ and “build back better”.

One platform to manage your global portfolios in real time

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