VIRTUAL DISCUSSION Sustainability & Climate Change: More than ESG Metrics The challenge of transition faced by industry and its race to meet climate targets, whether internally measured or externally imposed, will require an unprecedented level of action. History has repeatedly demonstrated that change comes from the fringe, not the center, and mostly it is Nicole Anderson bottom-up. Private market capital has a serious CEO & Managing Partner role to play in fueling the technology innovation Redsand Ventures and the brilliant entrepreneurial minds that will and can provide many of the solutions so desperately needed right now to accelerate execution. From Challenge to Resolution to Solution There is a 3-point Environmental, Social and Governance (ESG) framework for insurers to evaluate when engaging with sustainability-related initiatives— setting paths ‘From challenge to resolution and solution’. 1. ESG Challenges ESG is now worth around USD $40trn in funds being funneled to the most efficient fossil fuel users and adopters of renewables to drive the transition to better energy sources. More than 450 investors managing these funds have now signed up to Climate Action 100+ climate initiative program. Still, the space remains highly heterogeneous. Investors, asset managers, and ESG rating providers differ on which issues are important and how to address them best. As a result, defining ESG is almost impossible. Even creating consistency around scoring ESG is a challenge, with about 300 ESG data providers in the market already. According to a Deloitte report, just 3-5% of insurers are prepared for climate change-related liability - physical and transitional risk. Now they must consider transition risk as part of a larger agenda. 29