Our investment guidelines, established by the Investment Committee of the Board, set the boundaries within which the Group’s external investment managers must operate.
We continue to monitor ESG and climate change factors on our investment portfolio.
While metrics and the means of measuring these factors are in development, they remain imperfect and Lancashire is committed to working with its external portfolio managers to further refine our analysis.
Of the Group’s externally managed investment portfolio, 96.7% of portfolio managers are signatories to the UN-supported ‘Principles for Responsible Investment’.
Lancashire operates ESG and carbon management investment guidelines, implemented by the Group’s investment managers, across the Group’s fixed maturity investment portfolios.
Compliance with the guidelines is monitored on a monthly basis and any adjustments are approved by the Investment Committee and the Board.
Lancashire monitors the ESG profile of its fixed maturity portfolio through the MSCI ESG rating tool. The current portfolio is designated as within the “average” ESG category.
In addition, 2023 was the third year in which Lancashire measured climate sensitivity of corporate bonds, so far as covered by MSCI, within its fixed maturity portfolio through a Climate Value at Risk metric (Climate VaR) aligned to the Paris Accord 1.5°C goal.
We welcome the opportunity to be part of the industry’s focus on driving action on climate change risk and look forward to coordinating with firms across the sector as we all rise to the shared challenges we face.