August 30, 2022

Greenwashing to some stakeholders? Reputation insurance authenticates the quality of a committee’s oversight processes.

Greenwashing to some stakeholders? “I definitely think that boards should consider having a specific committee to oversee safety or other, what the courts have called ‘mission-critical risks’ of the company,” Weinstein added. […] “The court has said, in many cases, ‘It really doesn’t have to be an effective system, it just has to be a system that the board put into place in good faith,’” she said.”

Agenda Week
September 30, 2022

“(B)oards should consider having a specific committee to oversee …what the courts have called ‘mission-critical risks’ of the company.”

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Greenwashing to some stakeholders? Why risk a claim of bad faith and performative oversight? Reputation insurance authenticates the quality of a committee’s oversight processes.

Reputation value is a strategic power companies use to sell more, faster, and at premium prices; and to obtain labor, vendor services, as well as capital on preferred terms.

Steel City Re mitigates the hazards of ESG (reputation) risk that threaten reputation value. We use parametric reputation insurances, ESG insurances, and risk management advisory services to make our clients reputationally resilient.

Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive Steel City Re reputation risk governance and management solution.

Click on the highlighted text for a broader view of reputation risk case studies and reputation premium; or to explore additional articles by Steel City Re here, mentions of Steel City Re here, and comments on newsworthy topics by Steel City Re here.

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Context and Background

Risk managers are now central to the process for managing risks to reputation and that’s a process marketers and communications professionals need to be a part of. The oversight of reputation risk management is mission-critical.

Courts have increasingly been ruling that reputation is a mission critical function and oversight of its management is a responsibility of the board of directors. Courts are also ruling that marketing statements companies make – if they related to issues that affect their reputation, like ESG – may be considered material by investors. Litigation along these lines has yielded large settlements or verdicts for plaintiffs.

Concurrently, the SEC has proposed new rules requiring disclosures by public companies related to their ESG activities; those statements could become a communications and reputational minefield; i.e., greenwashing to some stakeholders.

As a result, reputation risk management is evolving into an intelligence gathering operation spanning the entire enterprise, roping in the enterprise risk manager, compliance counsel, and increasingly, reporting up to the Chief Legal Officer. There is a growing recognition that reputation is not a product merely of marketing and media coverage, but of the degree to which stakeholders’ expectations are aligned with actual performance. The reputation risk management process requires a thorough and ongoing analysis of stakeholder expectations, the risks of disappointment, and a plan for either managing those expectations or assessing and insuring against the cost of failure.    

One Last Question

ESG-linked reputation risks are prevalent and material. Are ESG insurance and reputation insurance part of your strategy?