The cost of straying into "greenwashing" could be very
high for businesses that misrepresent their environmental
credentials – as well as those who insure them.
In the weeks and months that preceded the global
Covid-19 lockdown, climate change and environmental,
social and governance (ESG) factors were in the
ascendant.
The Prudential Regulation Authority (PRA) had issued
a statement (SS3/19) on "Enhancing banks' and
insurers' approaches to managing financial risks
from climate change". From 15 October 2019 onwards,
the PRA prescribed that regulated entities embed the
assessment of financial risk arising from climate change into
their governance arrangements and financial risk
management.
