Environmental, social, and governance (ESG) requirements have grown in importance for investors, creating special challenges for insurers. While insurance companies have complex systems built up over decades to support financial reporting, many lack ways to track and report on their sustainability efforts. This can make it difficult to comply with ESG reporting requirements, as well as increase sustainability costs and alienate investors who care about ESG values.
The good news is that low code offers a fast and efficient way for insurers to report on their ESG efforts. In this guide, we’ll explain how insurers can use low code to meet ESG reporting requirements.
Short on Time? Here’s a Brief Overview
- Insurers must navigate multiple ESG frameworks and changing regulatory requirements around sustainability reporting. Automation is key to ensuring compliance.
- Low code can help insurers build automated ESG reporting pipelines quickly and cost-effectively. It can also be used to build ESG dashboards for external stakeholders and maintain compliance with sustainability requirements.
- Your company can get started with low code by understanding your reporting requirements and ESG-related data sources, choosing a low code platform, and building an automated reporting workflow.
The ESG Reporting Challenge for Insurers
Insurers looking to remain competitive by incorporating ESG initiatives face a fragmented regulatory landscape. There are multiple governing bodies involved in ESG monitoring, including the Global Reporting Initiative, the Sustainability Accounting Standards Board, and the International Sustainability Standards Board. Europe has also implemented the Corporate Sustainability Reporting Directive, which requires most insurers operating in the EU to report on their ESG efforts.
On top of that, some regulatory agencies and investment firms require insurers to meet minimum ESG standards or make climate-related financial disclosures. This is especially important for insurers since climate-related risks can lead to physical risks to insured property and increased claims in the future. Falling behind on reporting requirements or producing inaccurate reports can lead to costly compliance issues.
However, collecting data about an insurer’s ESG efforts can be highly challenging. Companies must collect data from multiple teams—including underwriters, facilities managers, and HR—to get a full picture of their ESG efforts. This data must then be unified, validated, and organized into reports for different governing bodies and regulators. Changing requirements over time make this reporting process even more complex.
The solution for insurance companies is to automate as much of the ESG reporting process as possible. But due to the long time horizons and high costs of traditional development, many insurers have struggled to accomplish automation.
Leveraging Low Code Platforms for ESG Reporting
Low code software can help insurers overcome the challenges associated with traditional automation strategies. These platforms offer customizable templates, drag-and-drop interfaces, and ready-made software blocks, so you don’t need a dedicated team of developers to build ESG reporting pipelines.
This low code approach has several key advantages for insurance organizations. First, building an automated reporting process with low code tools is fast. You don’t need to wait for busy developers, which saves time and money. In addition, low code is well-suited to agile development, which means you can prototype and launch a functional data pipeline in weeks instead of months.
Another advantage to using low code for ESG reporting is that it makes integrating your company’s core systems, like underwriting, facilities management, and HR platforms, easy. Crucially, low code integrations don’t risk disrupting mission-critical software like writing new code for existing systems does.
Low code platforms are also highly flexible and scalable. So, you can easily update your reporting workflows as requirements change and ensure your ESG reporting processes remain aligned with your broader business strategies.
Key Benefits of Low Code Solutions in ESG Reporting
Low code solutions offer several key benefits for ESG reporting at insurance companies.
1. Data integration and management
Low code enables you to seamlessly integrate ESG data from a wide variety of disconnected sources. For example, you can automatically collect data from your HR information system, claims management platform, facilities management software, and customer relationship management software. Low code software also integrates with cloud databases, so you can store and aggregate your data.
2. Automation of reporting processes
Low code excels at automation and can help your business automate the ESG reporting process, which saves time and reduces manual errors. For example, you can create automations that generate ESG reports for various governing bodies. Low code also enables you to keep a human ESG officer in the loop to review and validate reports before they’re published.
3. Real-time dashboards and analytics
You can also use low code tools to build custom ESG dashboards for external stakeholders, like investors. This is a way to share up-to-date performance data so investors can make informed decisions. It also demonstrates your company’s commitment to ESG principles and meeting stakeholder expectations.
4. Compliance and audit readiness
Low code can also help ensure your company complies with ESG requirements by including automated compliance checks in your reporting workflows. You can also keep audit trails with low code tools, enabling you to trace ESG issues and resolve them before they result in costly penalties. In effect, low code serves as a form of compliance risk management.
Selecting the Right Low Code Platform
It’s important to choose the right low code platform for seamless ESG reporting. Key features to look for include:
- Scalability: Low code platforms should be modular and offer the ability to deploy workflows in the cloud so they can scale up as your company grows.
- Security: Low code platforms should offer role-based access permissions and data encryption to keep sensitive company information safe.
- Ease of use: Low code platforms should be user-friendly enough that non-technical employees can use them to build basic reporting workflows.
- Ready-made integrations: Ready-made integrations for popular HR information systems, customer relationship management platforms, and cloud providers can speed up the deployment of your ESG reporting pipeline.
Some of the top low code platforms for the insurance industry include Mendix, Appian, and Quickbase. We recommend Mendix as the best overall choice because of its agile collaboration tools, support for an incredibly wide range of data sources, and built-in quality assurance checks to ensure your ESG workflow is completely accurate.
Steps To Implement Low Code ESG Reporting Solutions
Here are the steps your company can take to implement ESG reporting with low code:
- Identify your reporting needs: Begin by considering which ESG frameworks your company must comply with and what data each framework requires to be reported.
- Map your data sources: Document what data sources your company has that are related to ESG efforts and must be reported.
- Choose a low code platform: Select a low code platform that’s scalable and offers integrations for your data sources. Mendix offers ready-made templates for ESG reporting.
- Build your pipeline: Use your low code platform to develop integrations for one or more ESG data sources and build a workflow to analyze and report that data. It may be helpful to start with reporting just one aspect of ESG, such as greenhouse gas emissions, as a pilot project.
- Validate your solution: Test and validate your workflow thoroughly before using it to deliver high-impact reports. Ensure the data is correct and the output meets your reporting requirements.
- Continuously improve: Once your ESG reporting workflow has been deployed, you can continuously improve it by adding data dashboards for stakeholders, integrating new data sources, and monitoring outputs to ensure your ESG reports remain compliant.
Embracing Low Code for Sustainable Insurance
Streamlined ESG reporting is crucial for insurers looking to attract sustainability-minded investors and comply with new ESG regulatory requirements. Using traditional development to automate reporting is cumbersome and expensive, but low code solutions provide a fast, cost-effective, and scalable alternative.
Ready to learn more? Check out our comprehensive guide to low code today.
How We Researched This Guide
This guide is based on insurance industry reports about ESG trends and expert analysis of low code’s role in ESG compliance. It also draws on case studies from other industries that have used low code for reporting automations.
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FAQ
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What do ESG reports include?
ESG reports provide detailed information about a company’s environmental, sustainability, and governance initiatives. This could include measuring an insurer’s carbon footprint or social responsibility, such as employee volunteer hours. ESG reports are intended to improve transparency for investors and prove compliance with ESG standards.
Is ESG reporting required for insurers?
ESG reporting requirements vary across countries. The US has no federal ESG reporting requirement, although many investors consider ESG efforts when evaluating companies like insurers. Most insurers operating in the EU (including those headquartered outside the EU) are subject to the Corporate Sustainability Reporting Directive, which mandates ESG reporting.
