Environment

We carefully manage our environmental impact and work with our customers, suppliers and business partners to respond to the changing climate.

This means looking at our operations and how we can reduce waste – water, electricity and other consumption. It also means investing in areas such as research, catastrophe modelling and new technologies that benefit our brokers and customers.

As a business with a long-term outlook, it’s important that we play our part in the debate on how to mitigate the impact of climate change on the global economy.

We recognise that the most effective way to engage with policymakers, customers and suppliers on climate issues is by acting at an industry level. That’s why we’re working together with others in our sector to play our part.

We achieve more together

We’re a founding member of ClimateWise, which aims to leverage insurer’s collective expertise to better understand, communicate and act on the risks associated with climate change and work closely with Lloyd’s and the Association of British Insurers (ABI).

More information on ClimateWise and the work Hiscox is doing here is available at www.climatewise.org.uk.

What are the odds? It’s what gets us out of bed in the morning.

Many of the risks we underwrite are impacted by climate variability so it’s vital we understand as much as possible about climate risk. We actively invest in research, catastrophe modelling and new technologies that improve our underwriting capabilities so we can provide products our customers can rely on.

For example, following the devastating California wildfires of 2018, we invested in new research and modelling to further increase our understanding of the risk. By licensing a new risk model for wildfire, and applying our ‘Hiscox view of risk’ we are now able to set premiums more accurately.

The flood threat

In flood, through our participation in the UK’s Flood Re scheme, and our award-winning US FloodPlus product, we’re protecting more homeowners at risk of flooding who otherwise would have had no cover or not enough cover.

Damage caused by escape of water is the biggest driver of home insurance claims globally. We were the first UK insurer to offer a free Leakbot, the smart water leak alarm, to all new and existing buildings insurance customers, helping to prevent escape of water damage before it occurs.

Industry partnerships that put customer needs first

Having great relationships with our brokers is important to us, and we look to build strong and lasting partnerships with those that share our values.

Our ‘superb service’ ethos means we take the time to develop a greater understanding of individual customer and brokers’ needs. Hiscox UK and Hiscox London Market have Chartered Insurer status from the Chartered Insurance Institute (CII), which recognises the professionalism and expertise of staff and helps to attract business partners looking to work with high-quality insurers. Across the Group we run annual broker summit events for our broker partners and the rising stars in our businesses.

Supporting the transition

ESG 3033 – which launched in March 2023 – is nested within Hiscox Syndicate 33, leaning on existing stamp capacity and complementing Hiscox London Market’s existing portfolio. It is the insurer’s first specialised Lloyd’s sub-syndicate and provides additional insurance capacity and support to clients with positive ESG credentials, such as renewable power generators and energy storage providers. ESG credentials are assessed using a combination of proprietary and independent third-party data, with cover available for a range of insurance lines and industries operating anywhere in the world where Lloyd’s licences are valid.

Reducing our environmental impact

We care about the environment and have established a network of employee-led country Green Teams which share a common purpose but whose activities are tailored for each country. Together these teams can collaborate, share ideas and information to improve how we work, then implement new office practices that are not only efficient but environmentally responsible.

Keep Bermuda Beautiful beach clean - photo credit: Anne Hyde

Keeping Bermuda beautiful

Our employees are involved in a number of environmentally responsible initiatives around the world. For example, in Bermuda we work with Keep Bermuda Beautiful, which is the island’s oldest environmental charity. With the help of volunteers, the group carries out monthly neighbourhood clean-ups, in addition to their annual island-wide spring clean in May and marine clean in September.

Through their Adopt an Area initiative, which gives individuals or teams responsibility for a specific piece of the island, Hiscox has its own designated area to take care of, so our Bermuda team work together to hold regular beach clean-ups.

Managing our carbon footprint through ambitious net-zero targets

Central to our efforts to manage our environmental impact is an ambitious set of targets for the reduction of GHG emissions. We announced our new Group-wide GHG targets with our 2021 full-year results, and during 2023 we have focused on embedding them. These targets, which were developed using SBTi methodologies and designed to align with a 1.5°C net-zero world by 2050, are:

reduce our Scope 1 and 2 emissions by 50% by 2030, against a 2020 adjusted baseline*;
reduce our operational Scope 3† emissions by 25% per full-time equivalent (FTE) by 2030, against a 2020-adjusted baseline*;
transition our investment portfolios to net-zero GHG emissions by 2050. The aim is that more than 25% of our corporate bond portfolio by invested value will have net-zero or Paris-aligned targets by 2025, and more than 50% by 2030;
engage with our suppliers, brokers and reinsurers on our net-zero targets and on their plans to adopt Paris-aligned climate targets;
monitor emerging standards around underwritten emissions and collaborate across our industry on their development, aligning with best practice in this area as it emerges.

* Baseline year adjusted in light of Covid-19-related lockdown measures, to reflect a more normal year in terms of business travel etc.
† Operational Scope 3 emissions predominantly consist of purchased goods and services and capital goods, and business travel (air, rail and car travel).

We continue to focus on reducing the emissions we have control over, and to work closely with our partners where that control is shared. Where common standards and methodologies do not yet exist – for example, in measuring and assessing supply chain impacts, and underwritten emissions – we want to help shape the solution.

We continue to focus on managing and minimising our carbon footprint as a Group. While we saw a 14.5% decrease in our operational GHG emissions in 2023 against our 2020 baseline year, our total operational footprint increased by 18.7% in 2023 when compared to 2022.

While some of this increase relates to emissions arising from an increase spend in capital goods, there are other areas where we have seen an increase in emissions due to continued improvements in data accuracy as we continue to enhance our data collection processes.

We also saw an increase in upstream transport and distribution emissions, as we have this year started to account for transport emissions related to purchased goods and services and capital goods as part of our Scope 3 footprint.

Business travel emissions this year also reflect the expected rebound in travel-related emissions that we reported last year, as work patterns continue to normalise.

Our global GHG emissions - 2023 emissions and 2020 baseline*
Scope	2023 (tCO2e)	2022 (tCO2e)	2021 (tCO2e)	2020 (tCO2e)	2023 vs. 2020 baseline
Scope 1	409	787	678	615	-33.5%
Scope 2 (market-based)	1,043	926	866	1,111	-6.1%
Total Scope 1 and 2	1,452	1,713	1,544	1,726	-15.9%
Scope 3 (operational)	23,495	19,298	17,116	27,461	-14.4%
Total operational footprint	24,947	21,011	18,660	29,187	-14.5%
Scope 3 (non-operational)	14,559	9,862	8,458	7,046	106.6%
Investments†	129,526	127,497	125,156	135,275	-4.2%

*GHG emissions are calculated according to the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition). Hiscox uses market-based Scope 2 emissions for reporting in line with its GHG reduction target. Scope 1 includes natural gas, fugitive emissions (leakage of gases from air conditioning and refrigeration systems) and company cars, while Scope 2 includes electricity and district heating/cooling. Operational Scope 3 includes operational suppliers (office and other related services), capital purchases, fuel and energy-related activities, waste generated in operations, business travel, employee commuting and remote working. Non-operational Scope 3 includes emissions that do not directly contribute to the emissions associated with daily business activity, including non-operational purchased goods and services, transportation and distribution and downstream leased assets.

An assessment across all categories of Scope 3 emissions has taken place and the relevant categories are disclosed as part of our full GHG inventory (above). Note some emissions totals may not tally due to rounding. A copy of our Streamlined Energy and Carbon Reporting (SECR) GHG emissions table can be found on page 59 in our Report and Accounts 2023.

The investment emissions are calculated using the Enterprise Value Including Cash (EVIC-based) method of attributing financed emissions to investors, and calculations use Morgan Stanley Captial International’s (MSCI) carbon data† as the ultimate source. Our 2020 operational emissions baseline for business travel has been restated to project pre-Covid travel patterns.

†Although Hiscox’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the ‘ESG Parties’), obtain information (the ‘information’) from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness, of any data herein and expressly disclaim all express or implied warranties, including those of merchantability and fitness for a particular purpose. The information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for, or a component of, any financial instruments or products or indices.

Further, none of the information can in and of itself be used to determine which securities to buy or sell or when to buy or sell them. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein, or any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Statement of verification 2023

We continue to focus on reducing the emissions we have control over, and to work closely with our partners where that control is shared.

In addressing our Scope 1 and 2 targets, we are already engaging with our facilities managers across the Group to continue to transition our offices to renewable electricity contracts. Where we have total control over our utility providers, this is easier to do, but where that control is shared, or where it belongs to our landlords, we will petition for change. We are also reassessing our existing use of company cars, which is currently limited to a small fleet in some of our European operations. We are already making progress here, having retired our fleet of company cars in Germany during 2021, and in those areas where it is not possible to eliminate the fleet entirely, we intend to transition to electric vehicles over time.

On operational Scope 3, which is dominated by business travel, we are currently focused on improving the consistency of travel data across the Group to enhance our understanding of both volume and class of travel, to ensure our action plan is appropriately targeted.

Beyond targeted action, we also offset the emissions we could not reduce through an accredited carbon offsetting scheme. Our global emissions are currently offset through a collaboration with a solar project in India. We continuously review and asses our governance process around carbon offsetting, as we look to remain operationally carbon neutral as we have been since 2014.

About the scheme
Our global emissions are currently offset through a collaboration with Axis Wind Farms (Rayallaseema) Pvt. Ltd, a VCS-accredited wind energy project based in India (VCS 2052). The main purpose of this project is to generate clean electricity through renewable wind energy, and the project is located in the Anantapur district of Andhra Pradesh. Over the 10 years of its first crediting period, the project will replace approximately 202,492 tCO2e of anthropogenic GHG emissions per year, thereby displacing 216,153 MWh/year of electricity from the generation-mix of power plants connected to the Indian grid, which is mainly dominated by thermal/fossil fuel based power.

2023 Carbon offsetting certificate

Sustainability reporting and policies

Our latest reports, policies and disclosures on environmental, sustainability and social governance issues.

Our Report and Accounts outline our approach to risk management, including our views on social governance and environmental sustainability.

Report and Accounts

Hiscox's approach to materiality assessment

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Our annual climate report tracks our progress against climate change issues.

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Our environmental policy sets out the standards we aim to achieve throughout Hiscox Group activities.

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(Re)insurers have a role in ensuring an orderly transition to a low carbon economy and we want to play our part. Hiscox has a Group-wide exclusions policy, effective from 1 January 2022.

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Read our latest CDP disclosure.

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