For media enquiries, please contact CEO Caspar Murphy : caspar.murphy@vidigital.tech
Anti-Slavery
This statement is made on behalf of vuw.ai pursuant to section 54(1) of the Modern Slavery Act 2015.
This statement is pending approval from Vuw.ai’s Board as of March14 2024.
Responsible business
We are committed to acting ethically and with integrity and transparency in all professional dealings, and to having effective systems, processes and controls in place to safeguard against any form of modern slavery taking place in both vuw.ai and our supply chains.
It is our policy to offer equal treatment to employees, and prospective employees, ensuring that all are treated fairly and with dignity and respect.
We strive to be a responsible business; from our environmental efforts, being ethical in our approach to how we do business, our charitable partnerships, supporting our communities and employee fundraising efforts. Our vision is to use our expertise, influence and passion as a force for good in our local communities and the wider world. We have a responsible business committee that works to uphold our values in this area and this approach is embedded in our culture and policies.
We are becoming as accredited Living Wage employer by the Living Wage Foundation and are committed to fairly remunerating our employees and all third-party staff operating on our behalf.
Supply chains
As a specialist provider of underwriting services, our supply chains are not ones that would normally be associated with slavery or forced labour.
That said, we place an expectation on all our suppliers to comply with local laws and regulations. In addition:
We ensure any engagement with our suppliers is in line with our procurement and outsourcing policies, which are overseen by the Chief Operating Officer.
Material contracts are subject to approval by a commercial contract review group, which is responsible for the review and management of material suppliers.
Material suppliers and outsourced providers are subject to monitoring and performance review.
We conduct regular slavery and human trafficking risk assessment of our suppliers.
We continue to ensure the group’s contracts include a Modern Slavery Act clause.
Our policies
As a responsible business, we hold ourselves to the highest standards of ethical conduct. We operate a number of policies that enable us to identify and mitigate the risk of modern slavery and human trafficking. These include:
Procurement and Outsourcing Policies;
Financial Crime Policy, inclusive of anti-money laundering, anti-bribery & corruption and fraud; and Whistleblowing Policy.
We encourage employees to raise any concern of wrongdoing, including concern related to modern slavery and human trafficking, without fear of reprisal or victimisation. Our whistleblowing policy provides employees with various means by which they can confidentially raise concerns. This includes escalation to senior management or directly to an applicable financial regulator.
Training
During the past year, we have continued to train our employees on our responsibilities and approach to modern slavery. We will continue to ensure that key persons in our business remain aware of our commitment to The Act.
Our progress
Throughout the past year we have sought to address the priorities outlined in our 2021 statement and will be introducing the following measures throughout 2022 to help improve our efforts in tackling modern slavery:
Employees and external parties are encouraged to alert any malpractice or concerns of wrongdoing anonymously if they so wish to contact@vuw.ai
Our priorities for 2024/25
We are always looking to make improvements in our approach to tackling modern slavery within our firm and in our supply chain. As such, we have identified a number of areas that we will address over the coming year:
Continue to review and strengthen our annual risk assessment exercise. This will ensure we adequately identify and analyse any potential risk areas in our supply chains and strengthen our controls where necessary;
Continue to strengthen our modern slavery and human rights due diligence to both new and existing suppliers. By doing so, we will continue to properly assess the risk management and internal controls framework of potential and current suppliers to ensure adherence to The Act; and
Continue to improve our risk and control framework and widen the scope of our supplier tender process by incorporating modern slavery as a risk factor within our definition of ‘material supplier’.
Establish key performance indicators (KPIs) in order to measure the effectiveness of our actions and progress in tackling modern slavery and human trafficking.
Caspar Murphy
Chief Executive Officer
What is a complaint?
The FCA defines a complaint as an expression of dissatisfaction (oral or written) about the provision of, or failure to provide, a financial service. It alleges how you have suffered (or may suffer):
financial loss;
material distress; or
material inconvenience
In the event you wish to make a complaint please address your complaint to the individual at vuw.ai who handles your affairs.
Should you prefer to, you can alternatively address it to:
Vuw Complaints Manager
Vuw.ai, 6 Drakes Meadow, Penny Lane, Swindon, England SN3 3LL
contact@vuw.ai
Investigation of complaints
Where a complaint is received, our Risk & Compliance Unit will investigate it fairly and impartially. We aim to assess any complaint consistently and promptly to determine whether it should be upheld and, if so, what remedial action or redress may be appropriate. We shall resolve it at the earliest opportunity with the aim of doing so within 8 weeks of receipt.
Referring complaints to non- vuw.ai firms
If you complain to us but we are satisfied that the complaint really relates to another firm, or that the complaint relates to us and another firm jointly, we will refer the matter on to that firm (so they can consider your complaint). We will do this promptly and tell you what we have done. We will also provide you with the other firm’s contact details.
Timescale for initially responding to complaints
We will acknowledge your complaint promptly (generally within 5 business days) in writing, and will include written details of our complaints handling procedures. Where we are able to provide a final response immediately, the acknowledgement may be combined with the final response. You will be kept informed of the progress of the investigation.
Final or other response within 8 weeks
We will either send a final response (as described below) within 8 weeks or, at the end of that period, a response explaining that we are not in a position to make a final response, giving reasons for the delay and indicating when we expect to be able to provide a final response.
Should you remain dissatisfied with the response you receive from us, you may if you wish, refer your complaint to Lloyd’s.
Lloyd’s will investigate the matter and provide a final response. Lloyd’s contact details are as follows:
Complaints
One Lime Street
London EC3M 7HA
Complaints@lloyds.com
Market Services Telephone: +44 (0)20 7327 5693
Lloyd’s Fax: +44 (0)20 7327 5225
http://www.lloyds.com/complaints
Ultimately, should you remain dissatisfied with Lloyd’s final response, you may, if eligible, refer your complaint to the Financial Ombudsman Service (FOS). The Financial Ombudsman Service is an independent service in the UK for settling disputes between consumers and businesses providing financial services. The FOS’s contact details are follows:
Financial Ombudsman Service Complaint
Exchange Tower
London
E14 9SR
info@financialombudsman.org.uk
Telephone: +44 (0)300 123 9 123
http://www.financial-ombudsman.org.uk
The Vuw.ai Ltd website (“the website”) is published by Vuw.ai Ltd (“us” or “we”).
Please read our conditions of use carefully as by using the website you will be taken to have agreed to be bound by them. We reserve the right to vary the conditions of use at any time and will post any variations here. You are advised to review the conditions of use on a regular basis as you will be deemed to have accepted variations if you continue to use the website after they have been posted.
Care of Information published
We take every care and precaution to ensure that information published on the website is accurate when posted and regularly updated, but we do not guarantee its accuracy and we may change the information at any time without notice.
The information, wording and sample forms contained in the website are for your information only and are not an invitation to invest in the shares of, or any other products or services or otherwise deal in these or enter into a contract with Vuw.ai Ltd or any other company. The information provided shall not be binding on us and should not be relied upon in connection with any investment decision. Changes to or improvements in our products or services may be made at any time without notice.
You acknowledge that any reliance on any information or other material posted on the website is entirely at your own risk. You should check all information directly with us and should not rely on any material contained on the website as a statement, representation of fact or warranty.
The descriptions contained in these pages are for preliminary informational purposes only.
Published as is
We publish the website “as is” without any warranty of any kind, express or implied, as to the operation of the website, the accuracy of the information or the products or services referred to on the website (in so far as such warranties may be excluded under any relevant law) and we shall not be liable for any losses or damage that may result from use of the website as a consequence of any inaccuracies in, or any omissions from, the information which they may contain.
Legal Restriction of Jurisdiction
You are responsible for complying with any legal restrictions applicable to your jurisdiction. Access to the website will not constitute an offer in jurisdictions in which it would be illegal to make such an offer and in such circumstances it will be deemed to have been sent for information purposes only.
Copyright
Copyright in these pages is owned by Vuw.ai Ltd Group except where otherwise indicated by a third party’s proprietary notice. Images, trade marks and brands are also protected by intellectual property laws and may not be reproduced or appropriated in any manner without written permission of their respective owners. Unless specifically prohibited by a notice published on any page, you may make a print copy of such parts of the website as you may reasonably require for your own personal use provided that any copy has attached to it any relevant proprietary notices and/or disclaimers. All other use is prohibited.
No responsibility for third parties
We are not responsible for the content of any other website from which you have accessed the website or to which you may hyperlink from the website and cannot be held liable for any loss or damage you incur as a result of your use of any other site from which you hyperlink to or from the website.
Cyber vulnerability
We use all reasonable security measures to protect our website but it is impossible to protect totally against the abuse of the website (including but not limited to viruses or malicious attacks) by third parties, and you agree that it is your own responsibility to protect yourself against such risks.
Due to the nature of the internet and the need for updates and maintenance of the website, we do not guarantee continuous or uninterrupted access to the website without any faults.
Governing Law
These conditions of use are governed by the laws of England and Wales and you agree that the English courts shall have exclusive jurisdiction in any dispute.
To the extent that any part of these conditions of use is found to be invalid, unlawful or unenforceable by any court of competent jurisdiction such part shall to that extent be severed from the remaining terms all of which shall remain in full force and effect as permitted by law.
Vuw.ai Ltd is registered in England and Wales
Registered office: 6 Drakes Meadow, Penny Lane, Swindon, England SN3 3LL
Registered number: 13497980
Financial Conduct Authority (FCA) authorisation can be checked on the Financial Services Register at: https://register.fca.org.uk/
Please contact us at the address below should you have any queries: contact@vuw.ai
Please note that this website may use cookies and similar tracking technologies to recognize you, to customize and enhance your online user experience, to provide you with products and services tailored to your interests, and to help us improve the website.
Our website address is: http://vuw.ai
You can request to receive an exported file of the personal data we hold about you, including any data you have provided to us.
You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.
Contact CEO Caspar Murphy : caspar.murphy@vidigital.tech
VUW’s first phase Environmental Social and Governance strategy
Companies that perform well on ESG are generally more trustworthy. This is the common thread in a loose terrain, where a variety of big players are proposing frameworks for businesses to assess the importance of Environmental, Social and Governance criteria.
VUW has studied a range of these to prepare its Environmental, Social and Governance approach. (See graphic chart). This emerging necessity in business helps define our relationship to the world. It will serve VUW customers, workforce, partners, investors and communities.
ESG is still a loose terrain where common sense is gradually being translated into measurable criteria by a handful of rating organisations, such as Standard & Poor’s, Deloitte, MSCI, Sustainalytics, and RepRisk.
Environmental criteria consider a corporation as a shepherd of the environment, according to . Blaise Hope, writing for Sustainability on March 07, 2022. Social criteria look at how the company maintains connections with its workforce, vendors, customers, and the communities in which it operates – what impact it has on people at each stage of its value or supply chain. Lastly, governance is concerned with the leadership of a corporation, executive remuneration, audits, internal controls, and shareholder rights.
Research from Harvard Business Review, working with Siemens on The 6 Elements You Need to Build Effective ESG, identifies 6 critical factors as essential to the success of an ESG framework.
Decarbonisation
Ethics
Governance
Resource Efficiency
Equity
Employability
Siemens’ internal ESG targets are based upon this sustainability transformation platform, known as ‘DEGREE’.
For the time being, implementation is still up to a firm’s discretion, often under popular pressure. McKinsey Sustainability identifies three levels of corporate ambition in its Make ESG Real analysis. Minimum ‘do no harm’ practice, common practice and next-level practice, which fully integrates ESG into strategy and operations.
VUW’s positioning in the above concept map will place us in the upper category of ‘Next level practice’. We view ESG as a differentiator and core to overall strategy and we aim to increase social impact via innovation.
Legislation is being prepared in Europe and in the UK on disclosure and reporting, based on the UN Sustainable Development Goals (SDGs) and the IFRS Foundation’s SASB® Standards in relevant service industries such as Internet media and software.
The UK Financial Conduct Authority’s Sustainability Disclosure measures” of November 2023 are of interest. They tally with the EU regulation that took effect in March 2021, forcing financial market actors to disclose information about their sustainability strategy on their websites and elsewhere in the public eye. The EC concluded a consultation on implementation in December 2023.
Clearly good ESG is a requirement for society, the planet and people’s working conditions. It is also better for the bottom line. This optimistic assertion has recently been proved true in terms of disclosure, where studies show that good disclosure practises lead to better information flows and more reliable relationships between a firm and its investors.
An article on the fundamental effects of ESG disclosure, published via Science Directin the Journal of International Financial Markets, Institutions and Money Volume 81, November 2022, found that continually good ESG disclosure quality can grow ESG investment and increase a firms’ market value and ROA. Businesses that score well on ESG have better controls in practice and reduced downside risk, accelerating their growth.
Blaise Hope writing for Sustainability on March 07, 2022. concludes that good behaviour, optimisation and improvement, must be evidenced with good reporting. The McKinsey analysis too considers it vital that ESG disclosure cover a company’s full operations.
At VUW, we wish to go further and consider how ESG can be used by insurers to make decisions about risk.
Recent studies suggest that ESG rating can be a useful metric for assessing risk in insurance. A study of ‘Crash risk and ESG disclosure’ in the Borsa Istanbul Review July 2022( Volume 22, Issue 4) points out the moderating effects of ESG. Environmental, Social and Governance to offer greater control and greater insight. Companies implementing these practices gain a predictive power, and add information to perform effective risk analysis.
The author, Paulo Pereira da Silva, postulates that further information disclosure about ESG activities and risks mitigates crash risk by virtue of lower opacity and information asymmetry between managers and outside investors. Results from his examination of the ESG disclosure indicator suggest that all three dimensions (environmental, social and governance disclosure) weigh crash risk downwards. These relationships are under evaluation at VUW.ai.
ESG helps to improve a firms’ Tobin’s Q ratio (this ratio shows the relative under or over valuation of a business as it measures the market value of a company divided by its assets’ replacement cost) and more importantly their return on assets (ROA is a financial ratio measuring profitability in relation to total assets) and reduce downside risks.
We will be keeping track of best practice and the advance towards standardisation of ESG criteria in business operations.
Our longterm aim is to integrate sustainability indicators into the VUW decision engine, in keeping with our desire to help forge a better world.
Media Enquiries
For media enquiries, please contact CEO Caspar Murphy : caspar.murphy@vidigital.tech
Anti-Slavery
Anti-Slavery
This statement is made on behalf of vuw.ai pursuant to section 54(1) of the Modern Slavery Act 2015.
This statement is pending approval from Vuw.ai’s Board as of March14 2024.
Responsible business
We are committed to acting ethically and with integrity and transparency in all professional dealings, and to having effective systems, processes and controls in place to safeguard against any form of modern slavery taking place in both vuw.ai and our supply chains.
It is our policy to offer equal treatment to employees, and prospective employees, ensuring that all are treated fairly and with dignity and respect.
We strive to be a responsible business; from our environmental efforts, being ethical in our approach to how we do business, our charitable partnerships, supporting our communities and employee fundraising efforts. Our vision is to use our expertise, influence and passion as a force for good in our local communities and the wider world. We have a responsible business committee that works to uphold our values in this area and this approach is embedded in our culture and policies.
We are becoming as accredited Living Wage employer by the Living Wage Foundation and are committed to fairly remunerating our employees and all third-party staff operating on our behalf.
Supply chains
As a specialist provider of underwriting services, our supply chains are not ones that would normally be associated with slavery or forced labour.
That said, we place an expectation on all our suppliers to comply with local laws and regulations. In addition:
We ensure any engagement with our suppliers is in line with our procurement and outsourcing policies, which are overseen by the Chief Operating Officer.
Material contracts are subject to approval by a commercial contract review group, which is responsible for the review and management of material suppliers.
Material suppliers and outsourced providers are subject to monitoring and performance review.
We conduct regular slavery and human trafficking risk assessment of our suppliers.
We continue to ensure the group’s contracts include a Modern Slavery Act clause.
Our policies
As a responsible business, we hold ourselves to the highest standards of ethical conduct. We operate a number of policies that enable us to identify and mitigate the risk of modern slavery and human trafficking. These include:
Procurement and Outsourcing Policies;
Financial Crime Policy, inclusive of anti-money laundering, anti-bribery & corruption and fraud; and Whistleblowing Policy.
We encourage employees to raise any concern of wrongdoing, including concern related to modern slavery and human trafficking, without fear of reprisal or victimisation. Our whistleblowing policy provides employees with various means by which they can confidentially raise concerns. This includes escalation to senior management or directly to an applicable financial regulator.
Training
During the past year, we have continued to train our employees on our responsibilities and approach to modern slavery. We will continue to ensure that key persons in our business remain aware of our commitment to The Act.
Our progress
Throughout the past year we have sought to address the priorities outlined in our 2021 statement and will be introducing the following measures throughout 2022 to help improve our efforts in tackling modern slavery:
Employees and external parties are encouraged to alert any malpractice or concerns of wrongdoing anonymously if they so wish to contact@vuw.ai
Our priorities for 2024/25
We are always looking to make improvements in our approach to tackling modern slavery within our firm and in our supply chain. As such, we have identified a number of areas that we will address over the coming year:
Continue to review and strengthen our annual risk assessment exercise. This will ensure we adequately identify and analyse any potential risk areas in our supply chains and strengthen our controls where necessary;
Continue to strengthen our modern slavery and human rights due diligence to both new and existing suppliers. By doing so, we will continue to properly assess the risk management and internal controls framework of potential and current suppliers to ensure adherence to The Act; and
Continue to improve our risk and control framework and widen the scope of our supplier tender process by incorporating modern slavery as a risk factor within our definition of ‘material supplier’.
Establish key performance indicators (KPIs) in order to measure the effectiveness of our actions and progress in tackling modern slavery and human trafficking.
Caspar Murphy
Chief Executive Officer
Complaints
What is a complaint?
The FCA defines a complaint as an expression of dissatisfaction (oral or written) about the provision of, or failure to provide, a financial service. It alleges how you have suffered (or may suffer):
financial loss;
material distress; or
material inconvenience
In the event you wish to make a complaint please address your complaint to the individual at vuw.ai who handles your affairs.
Should you prefer to, you can alternatively address it to:
Vuw Complaints Manager
Vuw.ai, 6 Drakes Meadow, Penny Lane, Swindon, England SN3 3LL
contact@vuw.ai
Investigation of complaints
Where a complaint is received, our Risk & Compliance Unit will investigate it fairly and impartially. We aim to assess any complaint consistently and promptly to determine whether it should be upheld and, if so, what remedial action or redress may be appropriate. We shall resolve it at the earliest opportunity with the aim of doing so within 8 weeks of receipt.
Referring complaints to non- vuw.ai firms
If you complain to us but we are satisfied that the complaint really relates to another firm, or that the complaint relates to us and another firm jointly, we will refer the matter on to that firm (so they can consider your complaint). We will do this promptly and tell you what we have done. We will also provide you with the other firm’s contact details.
Timescale for initially responding to complaints
We will acknowledge your complaint promptly (generally within 5 business days) in writing, and will include written details of our complaints handling procedures. Where we are able to provide a final response immediately, the acknowledgement may be combined with the final response. You will be kept informed of the progress of the investigation.
Final or other response within 8 weeks
We will either send a final response (as described below) within 8 weeks or, at the end of that period, a response explaining that we are not in a position to make a final response, giving reasons for the delay and indicating when we expect to be able to provide a final response.
Should you remain dissatisfied with the response you receive from us, you may if you wish, refer your complaint to Lloyd’s.
Lloyd’s will investigate the matter and provide a final response. Lloyd’s contact details are as follows:
Complaints
One Lime Street
London EC3M 7HA
Complaints@lloyds.com
Market Services Telephone: +44 (0)20 7327 5693
Lloyd’s Fax: +44 (0)20 7327 5225
http://www.lloyds.com/complaints
Ultimately, should you remain dissatisfied with Lloyd’s final response, you may, if eligible, refer your complaint to the Financial Ombudsman Service (FOS). The Financial Ombudsman Service is an independent service in the UK for settling disputes between consumers and businesses providing financial services. The FOS’s contact details are follows:
Financial Ombudsman Service Complaint
Exchange Tower
London
E14 9SR
info@financialombudsman.org.uk
Telephone: +44 (0)300 123 9 123
http://www.financial-ombudsman.org.uk
Conditions of use
The Vuw.ai Ltd website (“the website”) is published by Vuw.ai Ltd (“us” or “we”).
Please read our conditions of use carefully as by using the website you will be taken to have agreed to be bound by them. We reserve the right to vary the conditions of use at any time and will post any variations here. You are advised to review the conditions of use on a regular basis as you will be deemed to have accepted variations if you continue to use the website after they have been posted.
Care of Information published
We take every care and precaution to ensure that information published on the website is accurate when posted and regularly updated, but we do not guarantee its accuracy and we may change the information at any time without notice.
The information, wording and sample forms contained in the website are for your information only and are not an invitation to invest in the shares of, or any other products or services or otherwise deal in these or enter into a contract with Vuw.ai Ltd or any other company. The information provided shall not be binding on us and should not be relied upon in connection with any investment decision. Changes to or improvements in our products or services may be made at any time without notice.
You acknowledge that any reliance on any information or other material posted on the website is entirely at your own risk. You should check all information directly with us and should not rely on any material contained on the website as a statement, representation of fact or warranty.
The descriptions contained in these pages are for preliminary informational purposes only.
Published as is
We publish the website “as is” without any warranty of any kind, express or implied, as to the operation of the website, the accuracy of the information or the products or services referred to on the website (in so far as such warranties may be excluded under any relevant law) and we shall not be liable for any losses or damage that may result from use of the website as a consequence of any inaccuracies in, or any omissions from, the information which they may contain.
Legal Restriction of Jurisdiction
You are responsible for complying with any legal restrictions applicable to your jurisdiction. Access to the website will not constitute an offer in jurisdictions in which it would be illegal to make such an offer and in such circumstances it will be deemed to have been sent for information purposes only.
Copyright
Copyright in these pages is owned by Vuw.ai Ltd Group except where otherwise indicated by a third party’s proprietary notice. Images, trade marks and brands are also protected by intellectual property laws and may not be reproduced or appropriated in any manner without written permission of their respective owners. Unless specifically prohibited by a notice published on any page, you may make a print copy of such parts of the website as you may reasonably require for your own personal use provided that any copy has attached to it any relevant proprietary notices and/or disclaimers. All other use is prohibited.
No responsibility for third parties
We are not responsible for the content of any other website from which you have accessed the website or to which you may hyperlink from the website and cannot be held liable for any loss or damage you incur as a result of your use of any other site from which you hyperlink to or from the website.
Cyber vulnerability
We use all reasonable security measures to protect our website but it is impossible to protect totally against the abuse of the website (including but not limited to viruses or malicious attacks) by third parties, and you agree that it is your own responsibility to protect yourself against such risks.
Due to the nature of the internet and the need for updates and maintenance of the website, we do not guarantee continuous or uninterrupted access to the website without any faults.
Governing Law
These conditions of use are governed by the laws of England and Wales and you agree that the English courts shall have exclusive jurisdiction in any dispute.
To the extent that any part of these conditions of use is found to be invalid, unlawful or unenforceable by any court of competent jurisdiction such part shall to that extent be severed from the remaining terms all of which shall remain in full force and effect as permitted by law.
Vuw.ai Ltd is registered in England and Wales
Registered office: 6 Drakes Meadow, Penny Lane, Swindon, England SN3 3LL
Registered number: 13497980
Financial Conduct Authority (FCA) authorisation can be checked on the Financial Services Register at: https://register.fca.org.uk/
Please contact us at the address below should you have any queries: contact@vuw.ai
Privacy Policy : cookies and personal data on VUW
Please note that this website may use cookies and similar tracking technologies to recognize you, to customize and enhance your online user experience, to provide you with products and services tailored to your interests, and to help us improve the website.
Our website address is: http://vuw.ai
You can request to receive an exported file of the personal data we hold about you, including any data you have provided to us.
You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.
Contact CEO Caspar Murphy : caspar.murphy@vidigital.tech
ESG Values
VUW’s first phase Environmental Social and Governance strategy
Companies that perform well on ESG are generally more trustworthy. This is the common thread in a loose terrain, where a variety of big players are proposing frameworks for businesses to assess the importance of Environmental, Social and Governance criteria.
VUW has studied a range of these to prepare its Environmental, Social and Governance approach. (See graphic chart). This emerging necessity in business helps define our relationship to the world. It will serve VUW customers, workforce, partners, investors and communities.
ESG is still a loose terrain where common sense is gradually being translated into measurable criteria by a handful of rating organisations, such as Standard & Poor’s, Deloitte, MSCI, Sustainalytics, and RepRisk.
Environmental criteria consider a corporation as a shepherd of the environment, according to . Blaise Hope, writing for Sustainability on March 07, 2022. Social criteria look at how the company maintains connections with its workforce, vendors, customers, and the communities in which it operates – what impact it has on people at each stage of its value or supply chain. Lastly, governance is concerned with the leadership of a corporation, executive remuneration, audits, internal controls, and shareholder rights.
Research from Harvard Business Review, working with Siemens on The 6 Elements You Need to Build Effective ESG, identifies 6 critical factors as essential to the success of an ESG framework.
Decarbonisation
Ethics
Governance
Resource Efficiency
Equity
Employability
Siemens’ internal ESG targets are based upon this sustainability transformation platform, known as ‘DEGREE’.
For the time being, implementation is still up to a firm’s discretion, often under popular pressure. McKinsey Sustainability identifies three levels of corporate ambition in its Make ESG Real analysis. Minimum ‘do no harm’ practice, common practice and next-level practice, which fully integrates ESG into strategy and operations.
VUW’s positioning in the above concept map will place us in the upper category of ‘Next level practice’. We view ESG as a differentiator and core to overall strategy and we aim to increase social impact via innovation.
Legislation is being prepared in Europe and in the UK on disclosure and reporting, based on the UN Sustainable Development Goals (SDGs) and the IFRS Foundation’s SASB® Standards in relevant service industries such as Internet media and software.
The UK Financial Conduct Authority’s Sustainability Disclosure measures” of November 2023 are of interest. They tally with the EU regulation that took effect in March 2021, forcing financial market actors to disclose information about their sustainability strategy on their websites and elsewhere in the public eye. The EC concluded a consultation on implementation in December 2023.
Clearly good ESG is a requirement for society, the planet and people’s working conditions. It is also better for the bottom line. This optimistic assertion has recently been proved true in terms of disclosure, where studies show that good disclosure practises lead to better information flows and more reliable relationships between a firm and its investors.
An article on the fundamental effects of ESG disclosure, published via Science Directin the Journal of International Financial Markets, Institutions and Money Volume 81, November 2022, found that continually good ESG disclosure quality can grow ESG investment and increase a firms’ market value and ROA. Businesses that score well on ESG have better controls in practice and reduced downside risk, accelerating their growth.
Blaise Hope writing for Sustainability on March 07, 2022. concludes that good behaviour, optimisation and improvement, must be evidenced with good reporting. The McKinsey analysis too considers it vital that ESG disclosure cover a company’s full operations.
At VUW, we wish to go further and consider how ESG can be used by insurers to make decisions about risk.
Recent studies suggest that ESG rating can be a useful metric for assessing risk in insurance. A study of ‘Crash risk and ESG disclosure’ in the Borsa Istanbul Review July 2022( Volume 22, Issue 4) points out the moderating effects of ESG. Environmental, Social and Governance to offer greater control and greater insight. Companies implementing these practices gain a predictive power, and add information to perform effective risk analysis.
The author, Paulo Pereira da Silva, postulates that further information disclosure about ESG activities and risks mitigates crash risk by virtue of lower opacity and information asymmetry between managers and outside investors. Results from his examination of the ESG disclosure indicator suggest that all three dimensions (environmental, social and governance disclosure) weigh crash risk downwards. These relationships are under evaluation at VUW.ai.
ESG helps to improve a firms’ Tobin’s Q ratio (this ratio shows the relative under or over valuation of a business as it measures the market value of a company divided by its assets’ replacement cost) and more importantly their return on assets (ROA is a financial ratio measuring profitability in relation to total assets) and reduce downside risks.
We will be keeping track of best practice and the advance towards standardisation of ESG criteria in business operations.
Our longterm aim is to integrate sustainability indicators into the VUW decision engine, in keeping with our desire to help forge a better world.
