We have expanded the list of climate policies we assess company engagement with to incorporate land-use related policy, referring to legislative or regulatory measures to enhance and protect ecosystems and land where carbon is being stored. Assessments under this category are currently underweighted in terms of their contribution to the overall company metrics. This weighting will be progressively increased over the next 6 months.
We adjusted the terminology used to describe the queries running down the left-hand side of our scoring matrix and added additional explanatory text to the info-boxes. This has no impact on the scores and methodology. It has been done following user feedback to improve clarity.
The American Council of Life Insurers (ACLI) appears to have engaged on emerging climate-related insurance regulations, generally not supporting new regulations and requirements for insurers.
In comments to the Federal Insurance Office (FIO) in 2021, the ACLI contested the idea that climate change poses a risk to the life insurance sector or that climate impacts on the sector could imperil the stability of the wider financial system. In the same comments, the ACLI urged caution with regard to climate-related insurance regulation.
Mention of sustainable finance or climate-related financial regulation is broadly absent from the ACLI’s website, apart from a 2021 blog post by President and CEO Susan K. Neely which discusses the ACLI’s engagement with regulators and lawmakers on ESG issues. Neely writes that the ACLI is actively engaged with the SEC, the National Association of Insurance Commissioners (NAIC), and the FIO, but gives no further details of engagement or policy positions. An ACLI presentation from 2019 discusses current and upcoming guidance and regulations on sustainable finance issues, including incorporating ESG into investment advice and corporate climate risk disclosures, but presentation slides do not show a clear position on these policies.
The ACLI appears to have a mixed position on regulated corporate ESG disclosure, not supporting enhanced disclosure requirements for insurers specifically. In 2021 comments to the SEC, the ACLI stated support for corporate climate disclosure requirements overall, but encouraged flexibility in reporting deadlines and frameworks for insurance companies. The ACLI has engaged with the NAIC to try and water down its redesigned Climate Risk Disclosure Survey. In comments on the first proposed draft in January 2022, the ACLI advocated for a delay in implementation and asked for the removal of certain questions. Additionally, the ACLI did not support the inclusion of close ended questions and opposed requiring Scope 3 emissions disclosure. In comments on NAIC’s second proposal in March 2022, the ACLI asked for a delay in compliance and attached a “redlined” version of the survey with desired revisions and removal of specific questions.
The ACLI appears to not support mandating scenario analysis and disclosure of climate scenario modeling for insurance companies. In comments on the first redesign, the ACLI specifically requested that climate scenario discussions be removed from the NAIC draft Climate Risk Survey. Also, in comments to the FIO, the ACLI stressed the uncertainty of scenario analyses and urged caution in using them in regulatory efforts, including in risk management and prudential supervision. In the same comments, the ACLI expressed its opposition to "overly prescriptive taxonomies" or frameworks for managing climate-related financial risks.
The ACLI has disclosed some limited information on sustainable finance policies it is tracking, but lacks a dedicated, clearly identifiable disclosure of policy positions and lobbying activities. Letters to regulators and policymakers are not disclosed on the ACLI’s website, and neither are the positions outlined in those letters. The ACLI is transparent about both general and board membership, including which individuals hold key positions in the executive committee.