ROUNDTABLE: ESG

IN TERMS OF BERMUDA’S COMMUNITY, ARE COMPANIES DOING MORE AS ESG COMES TO PROMINENCE?

“Don’t do it just for the feelgood factor.”

Myra Virgil

Myra Virgil: People get very excited about how they can take action, how their staff can take action. Don’t let me take that away from people but I would implore businesses to treat ESG as they do their own businesses and look at the integrity of the intervention being proposed.

Is it evidence-based? Is there a model that’s already been demonstrated and proven? Don’t do it just for the feelgood factor. It should have specific outcomes rather than being an emotive piece.

Businesses should think of their approaches and actions as if it were their own money they are investing. It’s good to do things that feel good, but it’s even more important to make an impact and get results.

“The challenge is the long-term nature of the problem.”

Michael Neff

Michael Neff: Some asset managers use ESG scoring capabilities. At the security level, you can build a portfolio that generates an ESG score. You can quibble about how relevant it is but many clients want that.

The challenge is the long-term nature of the problem. Do you want to lend someone a 30-year mortgage when they’re building a house on a beach? There is no way to mitigate that because the property/casualty market works on an annual basis. The re/insurance world will move towards solving this and create a pricing mechanism and product structure that the market is willing to make available.

Virgil: That’s the lens we think about when social investing. It’s asking what would make this a successful investment in the next one, two, or three years?

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