CORPORATE GOVERNANCE REPORT 4. Environmental, Social and Governance (ESG) The PA published two Guidance Notices for comment namely 1) Proposed Guidance on climate-related risk practices for insurers and 2) Proposed Guidance on climate-related disclosures for insurers. The Proposed Guidance on climate-related risk practices for insurers sets out guidelines aimed at assisting insurers in complying with the requirements of Governance and Operational Standards for Insurers (GOI 3) (Risk Management and Internal Controls for Insurers) and GOI 3.1 (Own Risk Solvency Assessment (ORSA) for Insurers) as these prudential standards apply to climate-related risk for insurers. The Guidance Notice illustrates approaches that should be considered in managing an insurer's climate-related risks and provides guidance to insurers on integrating climate-related risks into their governance and risk management frameworks, including guidance on the insurer’s ORSAs. The purpose of the Proposed Guidance on climaterelated disclosures for insurers is to provide guidance to insurers regarding climate-related disclosures, taking into account the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB), under the four thematic areas of governance, strategy, risk management, metrics and targets. The PA is following international reporting developments, and these will be incorporated into future disclosure requirements as necessary. The PA also stressed that climate risk management is a developing area and approaches will evolve and mature over time. It is therefore important that insurers build the necessary capacity and capabilities to assess, manage and disclose climate-related risks and opportunities within existing risk management and governance frameworks. Group Compliance conducted impact assessments and provided a high-level overview to the Group Executive and Group Risk Committee of the impact across the Group. More analysis is underway with Group Compliance and Group Risk embarking on running workshops in 2024 to further embed the requirements of these guidance notices. 62 Corporate governance report
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