Dunant Re IC Ltd. - ESG Considerations

Dunant Re IC Limited, an incorporated cell of Replexus ICC (Guernsey) Ltd, issued its first privately placed transaction, a $3m volcano catastrophe bond, settled using Replexus’ unique ILSBlox blockchain and designed to provide funds to support humanitarian aid in the aftermath of a volcanic eruption of one of 10 pre-selected volcanoes.

The Management of Dunant Re IC Limited is committed to play its part in achieving its Sustainable Development Goals as set out in the Guernsey ESG Framework for Insurers.

Dunant Re IC Limited is a member of Guernsey International Insurance Association (GIIA), itself a signatory to UN’s Principles of Sustainable Insurance. Dunant Re IC Limited identified key Sustainable Development Goals (SDGs) and monitors its decision-making processes to ensure compliance such identified SDGs.

Dunant Re has assessed the risks underwritten as required through Pillar 2 and intends to achieve the following social and environmental SDGs through its issuance of insurance-linked securities:

Social

Basic needs

  • Clean water and sanitation

  • Good health and well being

  • No poverty

Well-being

  • Sustainable cities and communities

Environmental

Healthy ecosystems

  • Life below water

  • Life on land

Given the nature of the Company’s business plan, there are no other SDGs that are negatively impacted during the process in achieving the above-mentioned targeted SDGs.

Environmental, Social and Governance (ESG) has entered the mainstream as governments, regulators and clients demand that both insurers and their owners consider the wider implications of their business activities. And to ensure that they do so, transparency will be key. Adherence to the four principles are thus necessary:

  • We will embed in our decision-making environmental, social and governance issues relevant to our insurance business.

By being a member of GIIA and aligning our ESG interest to the UN’s Principles of Sustainable Insurance, the possible effect to commercial decision-making to the above-mentioned SDGs are being considered by the Company.

  • We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.

Collaborating with the Aon as Insurance Manager on ESG matters and the Red Cross as a client ensures alignment of common interests.

  • We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.

The Company will consider the amended Sector Code of Corporate Governance. As such, The Board considers the impact of climate change on the firm’s business strategy and risk profile and, where appropriate in the judgement of the board, make timely climate change related disclosures.

  • We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.

Confirmation that the investments held are in an institution with a good or better ESG rating.

  • An ESG rating of the applicable money market fund held as investment by the Insurer cannot be obtained, however the underlying investments of the fund consists of US Treasuries and US government debt - its ESG influence being minimal. It has been deemed more appropriate by the Insurer to consider the Fund Manager's approach to ESG.

  • As Federated Hermes, the Fund Manager concerned, have a clear ESG engagement plan, their ESG ethos is clearly prevalent with an active engagement towards a net-zero carbon and resilient economy.

The Company publicly discloses its alignment to the UN Principles of Sustainable Insurance with an annual review and assessment to changes in its operating model which could have an impact to the agreed SDGs or potentially negatively impacting other SDGs.

(Last reviewed by the Management of Dunant Re IC Limited - December 2023)