March 7, 2024
The Journal, Chartered Insurance Institute
https://thejournal.cii.co.uk/2024/03/07/health-ethical-pushback
https://www.linkedin.com/feed/update/urn:li:activity:7173868669163257856
When possibilities are humongous – there is bound to be an intense interplay of multiple currents. The Pharma industry is just that today. I highlight some unintended consequences insurers encountered in the Purdue Pharma L.P. – McKinsey & Company tango.
From painkillers – here are some interesting trends in yet another hot segment (ongoing coverage by Quartz Daily):
Surging demand for weight loss medications have created a drug duopoly. Novo Nordisk & Eli Lilly and Company currently dominate the market. This has transformed the two pharmaceutical developers into some of world’s most valuable companies – and they could become the first $1 trillion pharma firms.
Novo Nordisk’s weight loss drugs Ozempic and Wegovy are popular, and powerful. So popular that they’re raising the GDP of the company’s native Denmark.
So popular that food company executives are fearfully calling Novo Nordisk CEO Lars Fruergaard Jørgensen to ask for advice because patients don’t want to eat.
Oprah Winfrey recently announced that she’s leaving the board of WW International (formerly known as WeightWatchers), which she’s served on since 2015 as one of the company’s largest shareholders.
Btw she revealed last year that she takes a weight loss drug. She didn’t specify which one! WW’s share price responded by dropping nearly 20%.
From making a difference in weightloss and type2diabetes, could they tamp down inflammation, too? Needs to be seen.
Other players want a slice of the success as well. Since the possibilities are compelling, some may resort to say ‘turbo-charging’ their sales.
Covid misadventures seem to be almost forgotten. Obesity and diabetes are here to stay. So are painkillers. And grow!
In such exciting times, insurers need to watch that insurance does not end up as a license to stray outside the ethical terrain.
Amelia Marchand is a citizen of the Confederated Tribes of the Colville Reservation. She is the founder and lead advisor of the Indigenous-led conservation nonprofit L.I.G.H.T. Foundation (LF), the Senior Tribal Climate Resilience Liaison for the Affiliated Tribes of Northwest Indians (ATNI), and a volunteer board member with the Center for World Indigenous Studies (CWIS). She also serves on various Advisory Committees.
Amelia earned her BA in anthropology from Eastern Washington University, her MA in environmental law and policy from Vermont Law School and has over 25 years working in the cultural and natural resource fields. She is a Public Voices Fellow of the OpEd Project at the Yale Program on Climate Change Communication, an Associate Scholar of CWIS, and an alumnus of Presidential Classroom and the Ronald E. McNair Scholars Program.
Amelia’s lineage includes Okanogan, Lakes, Moses-Columbia, Palus, Chief Joseph Band of Wal’wama Nimiipuu, French, Irish, German, and Dutch. She is a wife, daughter and granddaughter of U.S. Army veterans, and a descendant of U.S. prisoners of war, the U.S. American Indian residential (boarding) school system, and the U.S. relocation program for American Indians.
Her personal experiences and family history have increased her passion for Indigenous rights, environmental justice, and implementing socially equitable solutions for climate change adaptation and mitigation that not only honor values of community and reciprocity; but also heal wounds from intergenerational trauma and institutional colonialism.
Praveen Gupta: Kindly tell me about your work towards elevating community-led climate action and environmental justice?
Amelia Marchand: There’s several different ways that I try to elevate not just climate justice, but Indigenous Peoples’ perspectives on climate justice. One of them is through my volunteer work with the L.I.G.H.T. Foundation. Sometimes that looks like writing public comment letters, sometimes that looks like bringing people together at different events and sharing ideas about topics like rights of nature or advancing Indigenous conservation of native plants and pollinators.
Other times through my formal work, it also looks like bringing people together for training and meetings to learn and share from one another about community and nation-building work. Those all provide opportunities for Tribes to advance their own climate initiatives, like investing and initiating in food security or energy sovereignty work.
PG: What are the challenges native communities face when responding to climate change?
AM: It’s very difficult to identify just one or two climate impacts affecting Indigenous Peoples because there are so many. The approach that I try to take is to look at identifying the baseline, of where Indigenous Peoples are right now. And in many different demographics and studies, you’ll see that today – in 2024 – American Indian, Alaska Native, and Native Hawaiian in the United States have significantly higher health risks than the rest of the population. They have significant challenges to higher education access and economic opportunities compared to other demographics. As a result of those disparities in access to health, access to education, and diverse economic opportunities, that makes those communities all the more vulnerable to climate impacts.
Those may be vulnerabilities resulting from direct climate impacts, like health impacts from wildland smoke, which is difficult for elders, youth, and those populations with asthma or respiratory conditions. Vulnerabilities can also look like reduced abilities to perpetuate cultural identity and traditional cultural practices. As an example, that could be loss of biodiversity which impacts ceremonial, subsistence, and medicinal foods important for survival in Indigenous communities; especially in rural areas where there’s food and water security issues.
All the impacts that the rest of the population are experiencing are also being experienced by Indigenous Peoples. However, the lack of economic parity and direct access to resources exacerbates climate impacts in Indigenous communities.
PG: Are Indigenous women/girls more vulnerable to climate breakdown than the[ir] male counterparts?
AM: I have heard again and again that climate change is a ‘threat multiplier.’ That means that the living conditions and quality of life from the richest to the poorest will be vulnerable to climate impacts, but that those climate impacts will be exacerbated – felt most extremely – by those on the margins of power, equality, and access to resources.
Unfortunately, the patriarchal systems of many colonial and capitalistic governments, as experienced in the United States where class and racial inequalities are still perpetuated, are structured in favor of benefiting men and boys. Some people may believe this subject is uncomfortable or unrelated to climate and the environment. But that belief is precisely why the topic must be discussed.
Just as Indigenous Peoples have fought for their human rights, so too have women, girls, and those with identities which do not confirm to Westernized colonial concepts of gender. Those in the marginalized and fringe sectors of American society will always be more vulnerable – and for Indigenous women/girls and two-spirit, lesbian, gay, bisexual, transgender, queer, etc. (2SLBGTQ+) peoples, a significant portion of the climate issues they experience may be the disruption in access to and availability of health and medical care.
For example, when temperatures rise, there is a correlation to increases in domestic violence. Most often, victims of domestic violence are women and children. When a flood, fire, or other natural disaster displaces people from their homes and communities, how well is the continuity of care for prenatal, postpartum, and menstruating women and girls? Will the evacuation centers be places of safety, security and inclusion where access to birth control and menstruation medical needs are freely available and abundant? Will sexual, reproductive, and behavioral health accommodations be safe and secure to prevent sexual harassment? When wages are lost and food, water, and necessities are scarce; who will ensure that sexual harassment, rape, prostitution, and human trafficking are not used as devices of control, submission, and power?
“We don’t need climate change impacts to highlight the humanitarian disaster happening in conflict zones far away, domestic abuse occurring in residences down the road, or discrimination impacting youth in the nearby school”.
These are things unpleasant to consider, but we must. I share these words as an Indigenous woman who has experienced harassment and discrimination throughout my life in many different ways: for being Indigenous. For being part-white. For choosing to end a relationship. For being a woman. For my age. For having an education. For being a mother. For being me.
The acronym “MMIWP” stands for Missing and Murdered Indigenous Women and People. I also share these words as a niece who lost her aunt to domestic violence before I ever had an opportunity to hear her voice. My aunt’s untimely death traumatized my family so much, and her loss so painful, that I was well into my teens before the story of her life and death was even shared with me.
We don’t need climate change impacts to highlight the humanitarian disaster happening in conflict zones far away, domestic abuse occurring in residences down the road, or discrimination impacting youth in the nearby school. We need changes to the way conflict is addressed. Imagine if political leaders made decisions centered and based on protecting the human rights of Indigenous women, girls, and 2SLGBTQ+ peoples.
Imagine if every U.S. state and every country had a task force established to not just understand and address the systemic causes of violence against Indigenous women, girls, and peoples – but to end it. Imagine if research and development for women’s sexual and maternal health were equal to men’s. Imagine if women’s reproductive systems were their own to control, and if our jobs were secured with mandatory paid maternity leave in an economy that actually cared for us.
This is my challenge and charge: If you truly love and care for your wife, sister, daughter, mother, niece, grandmother, aunt, God-mother…Then swear to uphold her inherent rights to exist free from harm, as she sees fit, and to experience full body autonomy – for she is a reflection of all of creation: Mother Earth. And what happens to her, ultimately is the fate of us all.
PG: Any thoughts on rights of nature, indigenous and advocacy perspectives?
AM: Indigenous Peoples understand that humans are not apart from nature and that nature, in and of itself, has its own right to exist, an inherent right to not be bound, contained, and extracted from. Rights of Nature (RON) is a legal concept under the division of Earth law, an evolving Westernized legal concept that actually has some really great elements.
Throughout different parts of the world, and also in some areas of the United States, there’s this movement to bring RON forward and enact laws and policies which will truly protect rivers, waterways, watersheds, landscapes and also species – specific rights of species – to exist. This RON advocacy does not put humans as the ‘end all, be all’; but instead recognizes that our ecosystem is interconnected to us. Humanity is dependent upon a functioning ecosystem for existence.
One of the initiatives that I’m really in support of, an initiative with the L.I.G.H.T. Foundation is identifying pathways for RON for the Columbia River. The Columbia River is a transboundary watershed, between the United States and Canada, the most hydroelectrically developed river in North America. There have been critical, negative impacts resulting from the construction of those hydropower dams to several Indigenous Peoples in Canada and the United States, as well as non-Native populations in the Columbia River Watershed. RON is a new concept to the Western legal system, but protecting those waters, lands, environments, and species that enrich us and give us life – there is nothing new about that to Indigenous Peoples.
“We have so many relatives, large and small, and sometimes I find it a bit difficult to describe this perspective to those outside of my community”.
PG: How did cultural teachings shape your professional perspectives and relationships with Water and our non-human relatives?
AM: We have so many relatives, large and small, and sometimes I find it a bit difficult to describe this perspective to those outside of my Indigenous community. There are Cultural Teachings that I’ve had since I was young from my family. As an example, one is that water is akin to a cleanser or purifier. It’s hard to describe, but as an example, if you have a bad dream, the first thing you do when you wake up is drink water and it will help cleanse that bad dream out of your mind.
Today, nearly everyone recognizes that water helps cleanse your body, internally and externally. But my teachings are that water cleanses your spirit too, it isn’t just to benefit your physical health. Thus, water is important, but not just your body’s physical need for water – it benefits your spiritual health as well. That might be the very first lesson that I learned, which is definitely a Cultural Teaching separate from going to school. This was Teachings from my culture, spending time with my Tuptup (great grandmother), all my grandmothers, and the elders of my community. There’s ceremonies where water is first, the first thing that you partake of at a meal, in ceremony with others, and you also end those same ceremonies and meals with water. In some ceremonies, we literally drink from the same cup.
The cleanliness of the water, the health of those in ceremony, it all extends to the relationship we have with one another and with the land. What is the health and quality of the water when we obtain it? Where does it come from? Does it derive from the ice on lakes in the winter time? Was it snow on faraway mountaintops which melted? Was it fog which condensed and traveled down the leaves and pine needles? There are so many different ways of water to exist, to be. There are so many ways in which we can experience and to consider our relationship with it.
One of my shifting thoughts is how everyone, everywhere, all around the globe, interacts with water and the place I live now… I don’t have snow-capped mountains in winter. I don’t have any icy lake to ice fish on with my family. There’s not even very many rivers or streams where I live now, which is so different from the place where I call home. But there’s an ocean. And I remember that all of us are connected through water. I think that’s one of the things that can keep us connected despite our distance over space and time: Recognizing that the same water that we are drinking now, at one point, was consumed by the dinosaurs. This is a cycle. And everything that happens here is contained in that water cycle. That memory. It is refreshing to think of it in that way.
“So, we don’t just have a responsibility to do good work because it seems like the right thing, or it is popular. There is an ancestral line which came before me”.
PG: How do you recognize the gift and responsibility of being a good relative for present and future generations?
AM: I was at a meeting just over a year ago, the National Congress of American Indians (NCAI) Winter Convention. The NCAI President Fawn Sharp made a comment about how, currently, our generation today – are ancestors. Ancestors of generations coming. That is one of the values that I truly feel. In my core, I didn’t have words for it when I was a young woman. But now, more and more people are starting to understand and connect with this perspective.
There is this line of men and women that came before me: my parents, grandparents, great-grandparents, so on. I am here because they survived, I am not here because of my own accord – my ancestors saw the moment of future opportunity. So, we don’t just have a responsibility to do good work because it seems like the right thing, or it is popular. There is an ancestral line which came before me. I continue this good work for those yet to come, and in that way, it’s the best action. It isn’t a burden, but a gift. The opportunity to make changes now.
PG: How do you leverage Indigenous leadership to advance climate action?
AM: Fortunately, there are many, many forms of Indigenous leadership advancing climate action. Some of them are through very formalized means within their Tribal governments: Tribal elected leaders and officials, making big, broad, bold strokes for their citizens, lands, and resources. There is also a surge in Indigenous leadership coming from the grassroots entities and organizations like Indigenous-led nonprofits that are making a difference in their home communities and working with allies to support Tribal Nations and Indigenous communities. There is also leadership coming from Natives in academia doing research which advances Indigenous Knowledge and cultural heritage protections, advancing Indigenous research to benefit Tribal communities.
Being responsive to Tribal youth that are wanting to see change and climate action in their own communities – those are some of the things that keep me going every day, looking at the beautiful, hard, uplifting and challenging work that comes from this diverse group of leaders, officials, academics, community organizers; not just from the U.S., but other countries as well. It’s so inspiring and I try to elevate those Indigenous actions and voices as much as I can. I try to connect people as much as I can and continue to share those perspectives, priorities, and values with anyone willing to listen and learn.
“There’s so many different ways to approach climate action through adaptation and mitigation activities, but for me, what it always comes down to is: food and water”.
PG: Your thoughts on integrating climate justice and permaculture ethics into adaptive and holistic management?
AM: Around 2016 or 2017, I had started to take a permaculture certificate course through Oregon State University. Unfortunately, we experienced a family emergency and I had to withdraw from the course before I completed it. But in just that short amount of time, I was very inspired by what I was learning about permaculture principles and ethics. Part of that is because they aligned so much with what I already knew, what I already felt and experienced through the Cultural Teachings I obtained from my family, elders, and community.
There’s so many different ways to approach climate action through adaptation and mitigation activities, but for me, what it always comes down to is: food and water. Access to clean, healthy, uncompromised water and access to nutritious, wholesome food. Those two things, if done correctly, can heal and soothe the body and the mind. Take, for instance, that you might want to plan an event – any event: birthday party, book club meeting, anniversary party. At any of those types of events, if you have good food and good water, your joy and camaraderie and laughter will flow and grow.
Another Teaching I’ve learned is that when we meet with another person for the first time, we don’t just bring ourselves for a meeting of minds, but you come prepared with a gift. Maybe that gift is a blessing. Maybe that gift is a prayer, but oftentimes that gift is also food. And for Indigenous Peoples it is a gift or a blessing of their own traditional foods, which are important to them. Oftentimes those foods are even sacred to them, centered in their own creation stories and so, bringing back those values and traditions in a way which humbly honors the opening of a meeting.
All of these opportunities to change can be done in a way that is sustainable and based on many Tribal beliefs, which I believe are sustainable as well. It is a beautiful thing to integrate into many aspects of our day-to-day business operations: Land use planning, community development, permit review, economic development. We all want healthy, thriving communities now and seven generations into the future, and that always will start and end with access to clean water and healthy, nutritious foods. That ideal doesn’t separate Indigenous Peoples from anyone else. It only continues to unite us.
PG: I am so grateful for your candid insights on the challenges faced by Indigenous Peoples, their wisdom and practices, Amelia. My best wishes for your fantastic work.
Illuminem: Originally published on http://www.thediversityblog.com
February 24, 2024
https://illuminem.com/illuminemvoicesprofile/praveen-gupta
Umesh Pratapa (P Umesh) and I explore evolution of liability niche in the Indian insurance market-place. What appeared to be a glacial shift – Bhopal Gas Tragedy to Satyam Computers was just that – has suddenly assumed a lightning pace. Tata Sons, IL&FS, ICICI, BharatPe, Zee Sony, PayTM, Byju are but a few names with recent board level action. The list keeps growing.
With ongoing ‘notional’ extension of board theatre – a D&O does not stop with manifestations of management liability. Environmental, Societal & Governance (#esg), #greenwashing, #ecocide, et al nudge it into a cross class realm.
It is not just the insureds and their boards getting sued. Insurers too are getting drawn into the ring. Something that Zaneta Sedilekova and I explored here: https://lnkd.in/dqZnmSRs.
And how is a new age climate #disclosure changing business? “Businesses and financial institutions that want to attract investors in a global market must adopt international standards, regardless of whether it’s a requirement in their home country.” Something that Indian boards hungry for overseas capital need to bear in mind: “Access to international financing will increasingly hinge on adherence to global climate #reporting,” says Pietro Rocco, Head of Green Finance at The Carbon Trust.
According to David Grayson, Chair of the United Kingdom’s Institute of Business Ethics, that will involve much more than preserving the climate.
“It’s a much wider waterfront covering #humanrights, labor standards in global #supplychains, modern day #slavery, #livingwage and #accountability for the misuse of a company’s products,” he tells The CEO Magazine. No respite in sight as boards must now equip to deal with #Polycrisis.
“Climate risks are here before us and we need to address them now. Obviously the first step is to get on board people who have a good understanding of climate risks in the wider sense of the word”, advises Umesh.
Hopefully this is not falling on deaf ears!
I recently spoke to P. Umesh whose book on Directors and Officers Liability (D&O) is expected, shortly. Given his four plus decades of first-hand experience in the Indian insurance industry, he shares insights on how a corporate/commercial market – predominantly property class – began embracing the liability class. More importantly, what lies in store for boards and independent directors – with a climate breakdown staring us in the face.
Over these years Umesh has worn several hats – lecturer, insurer, broker, lawyer and author. He is currently an independent consultant in liability insurance. Umesh is a recipient of IKON (International Knowledge and Opportunities Network) Dronacharya of the year award in June 2018. He is a member of the Institute of Directors (IOD). He chaired the Working Group constituted by the Insurance Regulatory and Development Authority of India (IRDAI) to Study Cyber Liability Insurance. His articles and updates can be seen on www.liabilityinsurancepractice.com.
Praveen Gupta: What steered a predominant property class driven corporate/commercial market that India was – during the 1980s – towards the ESG zone?
P. Umesh: The Satyam story is certainly one of the main triggers for an intense discussion and renewed interest in corporate governance in India. Interestingly this fraud at Satyam was not discovered by an external agency. But it was the admission followed by the resignation of B. Ramalinga Raju, founder, and CEO of Satyam Computers that brought out the fraud. Immediate investigation by Government of India and action by the regulators from USA, since shares of Satyam were also listed there, brought increased focus on corporate governance and the need for stricter rules and better compliance.
This subject has also acquired attention thanks to one corporate scam after another getting unearthed in various parts of the world. The discovery and reporting of these scams got accelerated because of legislative and regulatory activism, coupled with the fact that the Indian economy was opening, inviting closer scrutiny from global fraternity. D&O policy gained traction once Indian companies started getting listed abroad.
As regards Environmental Society and Governance (ESG), as we understand it today, it was the Bhopal Gas Tragedy, which sparked a furious debate for stricter regulations and better safety standards for environment protection. It also led to the enactment of The Environment Protection Act, 1986. In terms of specifics, it was in the year 2012, SEBI made it mandatory for the top 100 listed firms to have a business responsibility report and in the year 2023 introduced new norms for ESG disclosures by the top 1,000 listed entities by market capitalization.
“As regards Environmental Society and Governance (ESG), as we understand it today, it was the Bhopal Gas Tragedy, which sparked a furious debate for stricter regulations and better safety standards for environment protection“.
PG: Do you see PIL as a precursor to Class Action? We are yet to see one.
PU: To begin with – Public Interest Litigation (PIL) is not defined by any law in India. It is not filed by the affected person but another person for the greater good of society. I do not see PIL as a tool or facilitator for class action, the goals of both instruments being different. PIL is used for public good whereas class action is for the relief of the affected parties. While it was possible to file a representative suit under the CPC (Order I, Rule 8), nothing significant has happened so far. Only after specific provisions were incorporated under other statutes like The Companies Act, 2013, and The Consumer Protection Act 2019, the talk of class action has gained momentum.
I feel third party funding may prove catalytic in this area. The advent of “Third party funding” in India is likely to provide an infrastructural platform for classes to come together and receive funding to pursue legitimate actions of enforcement of rights. Contrary to what happened in some jurisdictions class actions may follow, instead of preceding, the development of third-party funding. It would be no surprise if third party funding contributes significantly in the evolution of a sophisticated class action regime.
PG: Despite the onerous liability of independent directors – D&O solution remains commoditised?
PU: Yes. Perhaps unavoidable in big markets like India, till claims start surfacing posing unexpected challenges and resulting in unpleasant surprises to all insurance supply chain. It is imperative for the insurance providers to underscore the intricacies at play, while it is equally important for purchasers to grasp and acknowledge these complexities. Informed buying is as important as informed selling.
Coming to the question of Independent Directors – The guidelines on Appointment of Independent Directors and Process of Board Evaluation issued by CII on 5th February 2024 are very timely. While in a few cases independent directors did not act the way they were expected to act, resulting in questioning the very relevance of that institution, independent directors do play a major role in ensuring compliance with all relevant norms for better corporate governance.
The Companies Act, 2013 – Sec IV Code for independent directors – Manner of appointments makes a reference to D&O policy as under: (d) provision for Directors and Officers (D and O) insurance, if any. The appointment of independent directors shall be formalised through a letter of appointment, which shall set out, besides other things, provision for D&O insurance, if any.
Recognising the importance of protection afforded by D&O insurance for independent directors, SEBI has mandated this policy for the top 1000 entities by market capitalization. If independent directors evince interest to read, understand the D&O policy and demand appropriate coverage, it will ‘decommoditise’ the policy, if I can use that expression. There was a case where a director insisted on having a D&O policy of certain features in place before joining the board. It is necessary for all directors, not only independent directors, to at least have the primary understanding of the D&O policy.
“In India, corporates are yet to see regulatory interventions, companies with global foot print need to have strong risk management systems… Any green washing will prove to be very costly in terms of financial implications and reputational damage”.
PG: While the U.S. SEC continues to dilly-dally, significant progress has been made in the EU. Corporate Sustainability Reporting Directive came into force at the start of 2024. This calls for Indian boards with global footprints to be more robust in risk managing?
PU: The EU has always been ahead in these matters like ESG or data protection. As per European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), certain companies are required to exercise due diligence in their supply chains in accordance with the human rights and environmental due diligence obligations. There are significant fines for failures. While in India, corporates are yet to see regulatory interventions, companies with global foot print need to have strong risk management systems in place lest they face adverse consequences. Any green washing will prove to be very costly in terms of financial implications and reputational damage.
PG: Carbon footprint of directors and officers is easy to monitor – thanks to technology. Most recently Elon Musk and Taylor Swift have been under vigorous scrutiny?
PU: These are viral news. Sometimes revival of economies is attributed to some of the celebrity personalities. Approaching the subject dispassionately, D&O policy would view it in terms of whether there was any wrongful act and whether it would attract any exclusion. Merely logging in more air miles and facing the allegations about carbon polluting may not result in denial of claim unless these activities are prohibited by law or insurance companies choose not to underwrite them.
PG: Given the rise in environmental activism in many jurisdictions, aren’t Indian directors and officers increasingly more vulnerable when travelling there?
PU: That is a genuine concern. Given the rise in environmental activism, directors are certainly exposed to these risks. Criminal actions on these violations appear unlikely soon. One needs to watch out for how the new legal concept ecocide develops. Wikipedia describes ecocide as “the mass destruction of nature by humans.[1] Ecocide threatens all human populations who are dependent on natural resources for maintaining ecosystems and ensuring their ability to support future generations”. Europe is in the forefront in this area also.
D&O risks being global in nature, it is necessary for the D&O policy to respond to these situations. One of the examples I can think of is coverage for extradition proceedings which assumed significance following the high-profile extradition of three British bankers to the USA to face fraud charges.
As regards kidnap and ransom risks, there is some coverage available under the D&O policy. This coverage provides for response costs in the event of a kidnap of an insured person. Coverage is for only response costs and not for settlements and that too when kidnap takes place outside the country of the insured person’s normal and ordinary residence. This coverage, therefore, cannot be seen as a substitute to Kidnap & Ransom insurance policy. One also needs to check the excluded territories for this coverage and other stipulations.
PG: Climate breakdown, Bio-diversity loss and Pollution are transforming management liability triggers into #polycrisis. How should D&O evolve?
PU: These should worry all as individuals first. Climate risks are here before us and we need to address them now. Obviously the first step is to get on board people who have a good understanding of climate risks in wider sense of the word. It is necessary to be compliant on substantiality and on disclosures, more as a matter of conviction than just compliance.
As regards climate change risks, whether gradual or otherwise, directors could be exposed to liability if they fail to grasp the seriousness of the issues and comply with the relevant laws. Greenwashing may also lead to litigation. Greenwashing refers to erroneous, misleading, or unsubstantiated claims on ESG commitments or failure to deliver on them. D&O policy should respond when directors encounter claims in spite of all the care and caution they exercise.
“Climate risks are here before us and we need to address them now. Obviously the first step is to get on board people who have a good understanding of climate risks in wider sense of the word. It is necessary to be compliant on substantiality and on disclosures, more as a matter of conviction than just compliance”.
Particularly with regard to climate risks, investigations by various regulators would be a concern. Regulations are getting more stringent and regulators are getting tougher. There are cases in India and abroad resulting from ESG noncompliance. The statement of Mr. Lester Brown “We have not inherited this earth from our forefathers; we have borrowed it from our children” should be a word of caution and source of inspiration and a stark reminder for all.
World would be a safe place only when we deeply appreciate the definition of environment as given in The Environment (Protection) Act, 1986, as “inter relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organisms and property”. In the Indian context climate litigation at present is mainly focused on environmental pollution. But it is yet to reach a noticeable phase against the boards. In some cases, the National Green Tribunal (NGT) did issue directions for appropriate actions against the officials for violations of the acts.
PG: What would be your guidance in terms of adequacy of cover?
PU: Very important issue. A D&O policy should not be seen as another policy purchase. It is to be treated as an integral part of board risk management. While there is no set rule which determines the scope and limit of the policy, it helps to get the exposure study and policy health check done by professionals. Current and emerging exposures need to be factored in for this purpose.
The limit of indemnity to be chosen depends upon many factors like the company’s nature of operations, foot print, share holding pattern, asset size and revenue generation territories etc. For listed companies market capitalisation would also be a factor. Peer group comparison also gives a good idea. It would be useful to seek benchmarking and data analytics reports, well in advance, from the insurance broker and insurer to evaluate various alternatives to choose the limit of indemnity.
PG: To what extent does your book de-mystify D&O/ Management Liability?
PU: The primary purpose of the book is to demystify the D&O liability insurance concepts and coverage. Once the conceptual foundations are well laid, it becomes that much easier to build further on them. This book talks about the various exposures the directors have and the ways to mitigate them. It is not enough if a company buys a policy as a mere tick box exercise.
A well-considered and regularly reviewed approach is necessary to ensure that insurance serves its intended purpose. It needs to understand the coverage, exclusions, extensions and various terms and conditions including what it needs to comply with during the policy period and in the event of a claim.
There were cases when a company, despite having a D&O policy, was not aware of the existence of the policy, had to forego a claim. The language used in a D&O policy is not really that complex. One only needs to realise the importance of the policy and read the document carefully.
My idea through the book is to facilitate understanding. It does not dispense with specialist advice though. The ideal way is to behave as if uninsured – that is to be professionally committed to the implementation of all stipulations and treat insurance as the last port of call.
PG: Many thanks Umesh for sharing an excellent perspective of several decades and where it is headed. My best wishes for your forthcoming book launch.
February 4, 2024
SOCLEEN Journal
The Insurance Times
January, 2024
My CII Journal blog published by the Insurance Times January 2024: https://online.flipbuilder.com/yojw/bpal/
Illuminem
February 5, 2024
It was a pleasure chairing Technical Session1 at the Society For Clean Environment (SOCLEEN: https://lnkd.in/d93ZMsdp) flagship annual event yesterday, at Vadodara (Baroda). This rapidly growing Gujarat city is a potential megapolis in the making. ‘Sustainable Urban Transportation Solutions’ is desperately needed to realise its #smartcity aspiration.
Like any other city, #transportation is dominated by private cars, three and two wheelers. The once significant cyclist population has dwindled and there is virtually nowhere to walk. A hurried metro plan is surely not the best idea as one heard from the learned keynote speaker Dr.@O P Agarwal, IAS. My panel members – Dr. Shalini Sinha and Dr.Nachiket Gosavi – brought out the deficiencies unique to Baroda and substantiated with excellent examples and data.
The Socleen Vice President Dr. Sanjay Pandit, a renowned physician, lamented the serious health implications of rising traffic and fossil fuel emission. Building overbridges, underpasses, bypasses and ring roads will not take us anywhere, he warned. And as the keynote speaker reminded – cities and their transportation systems cannot be left with engineers.
Just like all other cities, Baroda’s story of transportation intersects with brutality of their roads. It deserves to be addressed more holistically. Perhaps, therefore, it deserves benchmarking with sustainability index of global cities? Corporatisation of municipal affairs as it inches towards a US $ 1 billion annual budget? Last but not the least, return to an enlightened vision of Sayajirao which has sustained the city thus far!
All eyes on Prof. Chetan Vaidya now for an action plan to share with the city managers. A playbook in making for all other Indian cities and citizenry that moan and groan – confronted by the anarchic ways of #mobility.
#sustainability #urban #ESG
illuminem Amsterdam Smart City C40 Cities
Illuminem
January 31, 2024
https://illuminem.com/illuminemvoices/a-remedy-in-sight-for-fossil-fuel-deaddiction
Can insurers push back the #fossilfuel industry? From the emerging signals, howsoever faint, I believe insurers have the resolve to push back. Here is some evidence. Even at the cost of sounding far-fetched, we must begin somewhere.
This Op-ed for illuminem cites how U.S. insurers responded to the Opioid crisis. They made McKinsey & Co. accountable for ‘turbocharging’ the OxyContin sales.
The recent news on the consulting firm paying up US $78 million, to settle claims from insurers and healthcare funds, needs to be in the least welcomed if not celebrated. In turn insurers (and reinsurers) must think afresh before completely writing off the Net-Zero Insurance Alliance (#NZIA). “Concerns over antitrust risk” is not proximate enough a cause to abandon NZIA.
Needless to mention, there may be no time for Lloyd’s kind of an apology for the past shortcomings – given the pace of #Climatebreakdown.
There is a remedy in sight for fossil fuel de-addiction!
The Diversity Blog 