Allianz 2023 Risk Barometer – Evolution of legislation and regulations

Almost half of respondents cited cybersecurity resilience as their top ESG concern in Allianz’s Risk Barometer. For many, the war in Ukraine has increased the risk of a large-scale cyberattack, which can have broad ESG implications, including a company’s failure to protect its information network, the social consequences of disrupted supplies and damage to a company’s reputation. “Integrating cyber resilience into any enterprise risk management program or ESG framework is essential,” said Denise De Bilio, ESG Director of the AGCS Risk Advisory Unit. “These should contain clear policies on ransomware and address the impact of cyberattacks on employees and their stress levels, as well as risks to critical public infrastructure.”

With two in five workers planning to change jobs in the next three to six months, company working conditions are also high on the list of ESG risks. “The pandemic has altered the social contract between employers and their employees,” said DeBilio. “Companies are now required to address a wide range of labor and employment issues, from health and safety to wellbeing and diversity, while being responsible for societal impact , environmental stability and inclusive growth. The “S” in ESG will gain momentum as companies strive to acquire and retain a pool of environmentally and socially conscious talent. »

This momentum will be all the more urgent as ESG disclosure requirements are strengthened in major jurisdictions, such as with the Corporate Sustainability Reporting Directive (CSRD) in the EU.

The list of ESG issues facing companies is fueling the demand for skills and resources in this area, but the demand far outstrips the supply. The lack of consistent reporting standards and frameworks has hampered ESG knowledge gathering, training and certification. It also drives up costs. However, as ESG becomes established, a pool of talent will emerge, as will a prioritization of resources that support sustainability initiatives.

“The sustainability imperative is clear” said DeBilio. “The integration of ESG considerations into all aspects of the business has become the key performance indicator of a company’s financial health and its ability to meet rising stakeholder expectations to support the transition to a green, access capital, raise funds, meet increased regulatory and compliance requirements, and attract and retain talent.

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