How We Help Clients in Their ESG Journey

Effective governance requires a blended and balanced focus on resilience, growth and agile decision making. As part of our drive to find real-world applications for our values, Aon brings these skills to its work both internally and with clients. 

Corporate Governance and ESG Advisory

Strong governance oversight enables better decisions, creating the conditions for companies to quickly adapt to the changing landscape, shift priorities and proactively manage emerging risks. Through a holistic lens, Aon provides C-suites and boards of directors with real-time insights and solutions that help navigate an evolving ESG landscape, prioritize relevant risks, and focus on making better decisions by strengthening governance and oversight over key risk factors.

One of the most pressing topics for companies is understanding the need to have a clear and comprehensive strategy on ESG. While regulations help drive a company’s ESG focus and related public disclosures, navigating the expectations from multiple stakeholders can be daunting. Aon’s advanced analytics, advice, and solutions gives companies the clarity and confidence to make better decisions to protect and grow their business. This includes helping companies of all sizes and industries navigate, prioritize and address evolving ESG risks at all phases of their journey.

 

Navigating ESG Risks

Gaps in ESG strategy related to oversight, practices and policies and disclosures may indicate areas within an organization that could be exposed to significant risk. Aon works with clients to identify, quantify, and address or mitigate those issues and stay ahead of changing risks and regulations. Whether advising corporate teams and their boards, investors, lenders or insurance companies, we bring the combined expertise from across Aon to find the most effective ESG solution for a particular client’s needs.

“We empower corporate management teams and their boards by identifying the policies and practices of their top financial stakeholders and then preparing them for relevant stakeholder engagement with customized data, answers, and potential next steps,” says Laura Wanlass, global head of Corporate Governance and ESG Advisory. “We leverage real-time data and expertise to alert corporate clients on where they have immediate and potential going forward exposure. We work across business lines at Aon to identify critical areas for the task at hand, whether it is about insurance coverage, investor support, or some other need, and provide counsel so our clients can take action and obtain the best possible outcome.”

 

Cyber

One rapidly growing risk is cyber, an essential element of ESG strategy for companies and their boards of directors. Cyber risk has the potential to disrupt and destabilize businesses, and governance and risk management in this area has never been more important. “Organizations today are faced with increasing cyber security threats at a time when data and digital assets have never been more valuable,” said Catherine Mulligan, global co-head of Cyber Reinsurance Solutions. “Whether protecting the privacy of employee data or the value of intellectual and digital property, they need a partner who can help assess and mitigate risk, for the Board, for investors and customers.”

In Aon’s 2021 Global Risk Management Survey, global respondents cited the risk of cyber attacks/ data breaches as the top threat facing companies today. In 2021, Aon released research to help companies understand the dramatic rise in cyber attacks and other issues, helping to manage this rapidly expanding risk. We built on that research in 2022 with our Error & Omissions (E&O) and Cyber Market Review, aimed at helping companies navigate a difficult insurance market in the face of rising cyber-related volatility.

We are focused on data-driven solutions that help clients identify, measure and manage the risk for greater resilience and growth, building on our expertise, insights, and proprietary tools and methodologies. One such tool is CyQu, our cyber risk assessment platform. The tool helps companies across industries understand where they are in their cyber maturity and identify their biggest vulnerabilities, helping prioritize their actions and protect their business.

We work with companies to establish cyber security processes and governance frameworks that address cyber as the enterprise-level risk it has become — so they can make better cyber decisions and react to challenges in real time.

Impact story:
Cyber security organization design

For one client, cyber risk was increasing, and at the same time, their security organization faced the rising cost of attracting and retaining top talent in cyber defense. We brought the breadth and depth of Aon United to the challenge, bringing colleagues across solution lines to address our client’s needs. Our leaders from the Cyber Solutions Group within Commercial Risk and leaders from the Rewards Practice within Human Capital combined our unique expertise in cyber risk with best practices and benchmarking around talent and compensation. The result for our client was an organizational design solution that aligns their HR and technology teams to manage their cyber risk in a more cost-efficient way. We are also able to apply that model in other areas where risk and the costs of high-quality talent acquisition and retention are both rising — a challenge that is becoming increasingly common for clients in all industries and geographies.

 

Directors & Officers Insurance

Aon’s collaborative approach to Directors & Officers (D&O) liability insurance advice involves a thorough assessment of risk factors facing a client’s board of directors and management team. Liability concerns vary by country and industry, and our global professional network means Aon has the knowledge to assist clients with these specific challenges.

By focusing upon, understanding and differentiating a company’s legal, compliance, regulatory and financial reporting framework, among other risk factors, we are able to guide our clients through the evolving D&O marketplace to best position them to insurers. As insurers try to navigate a volatile equity environment, governance and management oversight continues to be relied upon in evaluating risk and determining pricing and coverage terms. Additionally, Aon has obtained ESG-centric coverage enhancements with the D&O insurance markets for clients with favorable ESG profiles. We seek to innovate in the D&O insurance market, enhancing offerings for strong ESG performers — such as offering additional D&O capacity exclusively for high ESG-related risks.

Impact story:
Analytics and expertise combine to guide the ESG journey

In one case, a multinational beauty company client needed to set up a corporate governance and ESG strategy and to improve their D&O risk profile. Aon worked with this client to identify, assess and prioritize material risks for the company and provide a roadmap to manage risks and opportunities through a governance process. This process articulated a single governance narrative for the company and included a gap analysis of the firm’s current ESG processes relative to important external stakeholder perspectives and the competitive market. This analysis drove an effective internal and external strategy through the D&O renewal process. Aon’s involvement did not end there. Through ongoing monitoring, analysis and insight related to ESG ratings agencies, institutional investors, proxy advisors, employees, customers, and insurance carriers, the client can confidently define and build a robust and effective ESG and disclosure strategy that will evolve along with it — and the landscape in which it operates.