The insurer issued a release discussing the ways in which it is addressing climate risks.
State Farm has announced the creation of its first Task Force on Climate-Related Financial Disclosures (TCFD) report.
The goal is to provide transparency regarding its climate risk strategies for policyholders and its own business.
In the release, State Farm recognized that climate change is bringing about greater risk and uncertainty for policyholders, particularly in terms of the severity, frequency, and location of catastrophic weather events. As such, the insurer has acknowledged its primary role as being there for its policyholders in the face of those increasing and evolving risks. It intends to do so “by maintaining the financial strength necessary to help them recover,” said the release.
To provide improved transparency with respect to how the insurance company is addressing climate risks for policyholders and its own business, the company has announced its first TCDF report. The report is an external framework offering companies guidance to businesses on the information required for investors and other stakeholders to conduct an assessment of climate change-related risks.
The TCFD report is based on last year’s State Farm data and offers a spectrum of information.
More specifically, the 2021 TCFD report provides information about how the insurance company addresses, governs, and evaluates climate change with respect to its customers. The report also assists the insurer in spotting areas where improvements are still required, or where further investigation is warranted.
The insurance company’s release underscored that it “is steadfast in our commitment to understanding and assessing the risks associated with climate change and the impact to our policyholders.”
The disclosure from TCFD is intended as a supplement to State Farm’s existing annual ESG Report. Though a considerable amount of the organization’s efforts geared toward addressing climate change risks fall within the ESG strategy’s Environmental component, three elements of ESG are interconnected, “and we are continuing to mature our coordination of ESG strategy and initiatives throughout the entire organization,” said the release.
The insurance industry is among the first to have to take on climate change face-on and insurers are being broadly watched as a gauge of how other industries will be expected to respond.