Trade credit insurers are subject to strict governance and, in their activities to identify and mitigate trading risks, have unique insight into the impacts of climate change and the importance of social justice and equality. We should be joining the wider ESG conversation seeking solutions and driving the agenda, write Olivier David, Director of Special Products at Atradius and Jesse van Cleef, Regional Director of Special Products at Atradius and the company’s ESG Product Team Leader.


Environmental, social and governance (ESG) goals and standards are increasingly finding their way onto boardroom agendas and business protocols. As the need to address climate change and social equality becomes more urgent, businesses throughout the world are adopting sustainability policies and practices. For some, this is in response to customer demand or supply chain requirements. For others, this is part of their operational ethos.


Environment and sustainability

For trade credit insurers, like Atradius, environmental issues simply cannot be ignored. For us, and credit insurers everywhere, climate change is a very real risk factor that affects the ability of businesses to pay their creditors. Understanding, predicting and accounting for environmental issues are inherently part of our risk underwriting processes.

Natural disasters like wildfires, tropical storms and floods not only devastate communities, they also have a disruptive effect on businesses in the disaster zone. According to the Australian Bureau of Agriculture and Resource Economics and Sciences, the 2019/20 drought and bushfires reduced farm cash incomes in New South Wales to nearly zero. It was one of the worst seasons in the state in the last 20 years. Meanwhile, the flooding in Germany earlier this year is estimated by the national insurance industry association GDV to have cost the country up to €5bn. Elsewhere, according to data published by the US government’s National Oceanic and Atmospheric Administration (NOAA), the US has sustained 308 weather and climate disasters since 1980. Significantly, these have become increasingly frequent. Between 2016 and 2020 there was an average of 16.2 events per year. Yet for the previous 20 years (1980 to 2020) the annual average was 7.1. By early October 2021, NOAA recorded 18 climate disasters in the US, with losses exceeding US$1bn each.

The impact of these events is not only felt domestically and can have a broader reach, especially through supply chains. The Australian wildfires resulted in cattle and sheep shortages. Some transportation hubs remain impacted by the German flooding. And severe flooding in Zhengzhou in China’s Henan province earlier this year submerged some key transport centres, disrupting supply chains for several days, including trains, roads and flights.

In addition to helping businesses understand and minimise the risks they may face when trading in specific areas, we wanted to explore what we could do as business and as global citizens. To that end Atradius has set up a cross-unit, international ESG Sustainability Team, to determine the direction we will take with our ESG agenda. Perhaps predictably (we are in insurance after all and believe in making well-informed decisions), we believe the first step is understanding what tangible difference we can make and how we can be most effective. To this end, we are currently completing in-depth research, creating measurable goals and benchmarking parameters.

We are exploring how we can create an effective sustainable credit insurance policy, sustainable credit ratings and carbon footprint reduction. We have started to survey our customers to find out what is important to them and have been assessing options that are currently available in the market. Certainly, the appetite for more sustainable working practices is evident. Among the businesses we polled, 70% perceived increased market pressure on their business to be more sustainable. According to a survey by KPMG in 2020, 80% of companies worldwide are now reporting on sustainability, either in a voluntary or mandatory capacity. Ratings agencies such as S&P, Moody’s and AM Best are integrating ESG scores to their overall ratings.

We already have excellent processes for assessing creditworthiness and completing due diligence. Can we add sustainability to our ratings process and is this something that our customers want? This is a key part of the conversations we are having with our customers and stakeholders as we determine our way forward.

Of course, focusing on risk and assessing potential environmental disasters is only part of our work. As a major credit insurer our aim is to enable trade. Supporting green energy projects and ESG-based funding are already key areas we are involved with. Indeed, Atradius is already actively supporting businesses in the areas of renewable energy and green real estate. Through our credit insurance and bonding products we have enabled major windfarm projects to be realised among many other important ESG developments.


Social issues

We all have a responsibility to operate our businesses more efficiently and more ethically, both internally and within our communities. At Atradius we have established and robust policies that help us maintain high standards of ethics and integrity throughout the business.

This is not a static position, but we are always moving forward and seeking ways to improve, especially in terms of employment and career development opportunities at every level. The latter features the development of diversity and gender equality milestones which, for Atradius over the next two years, will include the creation of a Gender Intelligent Organisation and ongoing dialogue on these issues among colleagues within working groups and also within our annual Employee Engagement Survey.

Valuing the voice of our people is a central part of the Atradius ethos and the Employee Engagement Survey is just one of the ways our business listens to staff. Management Board Roadshows, Town Halls, subject surveys and even informal online coffee breaks are all ways the company seeks to encourage employees to speak up and share views. A recent group-wide survey invited staff to share their views and needs so that when people are able to return to the office full-time, our workplaces can adapt to everything we learned during the pandemic.

Atradius is active in 50 countries and a fundamental part of our culture is understanding that we need to take care of our staff, but also our local surroundings, the environments and communities we are part of. Atradius care initiatives are both inward and outward looking. They focus on the well-being of our people, but also our communities, and feature volunteering and fundraising activities. In addition to this, the Atradius Group supports a range of charities and non-governmental organisations with donations, often match-funding charitable donations raised by local offices for local charities.



Sound corporate governance should be a cornerstone of all businesses.

We are pleased to say that accountability and transparency can be found at the heart of all relationships between Atradius and our stakeholders, including our customers, shareholders, employees, suppliers and communities. As a business we support and implement the 10 principles of the United Nations Global Compact on human rights, labour conditions, the environment and anti-corruption. Our ESG ambitions are classified as a group programme and percolate through to every level of the business and can be seen in initiatives such as the recently updated Group HR Policy and Group Human Rights Policy.

In 2020, we established the senior level Group Sustainability Committee to ensure a sustainability focus is embedded in the Atradius Group’s strategy. This includes a three-year Master Plan of actions as well as related areas such as digitalisation, omni-channel working and ESG risk management, where we have already been active for many years. The Sustainability Committee meets every quarter to discuss progress and achievements in the group’s ESG Sustainability areas.

We are building a strong expertise in underwriting for innovative, clean industries that will become key in the future and aim to become the preferred supplier of ESG-focused clients and financial institutions. There is already widespread support for ESG goals throughout Atradius and we will continue to embed this by attracting talent that shares our ESG mindset.

There is much to do, and we are still near the beginning of our sustainability journey. However, both as an insurer mitigating credit risk, a key enabler of trade and as an employer of people in more than 50 countries throughout the world, we are happy to be part of the sustainability conversation and committed to playing our part in a global effort to improve ESG where we can.