ESG Risk Integration

Sustainable Insurance Solutions

The Challenge

BNP Paribas needs to integrate four ESG criteria in order to be able to manage risks, meet investor expectations, comply with regulations, and create long-term value.

Regulatory Pressure

SFDR, EU Taxonomy compliance

Investor Demands

ESG-aligned products required

Risk Management

ESG risks in insurance products

Our Solution

ESG Risk Compilation Survey

Quantitative scoring framework for insurance product ESG alignment

ESG Framework

Four core criteria with 12 risk indicators

ESG Risk Integration Framework

Environmental

Sustainability & Climate

Social

Inclusion & Fairness

Governance

Responsible Investment

Shared Value

Social Impact

Environmental Sustainability (E)

Encourages practices to reduce environmental impact.

Climate Change & Physical Risks

  • Asset Damage
  • Operational Disruption
  • Underwriting Volatility

Resource Use & Circular Economy Risks

  • Resource Scarcity
  • Waste and Pollution Liability
  • Client Transition Risk

Transition Risks (Regulatory & Market)

  • Policy and Regulatory Changes
  • Technology Obsolescence
  • Greenwashing and Reputational Harm

Ecosystem & Biodiversity Risks

  • Biodiversity Loss Impact
  • Nature-Related Liability
  • Ecosystem Service Disruption

Social Inclusion (S)

Accessible to a broad audience.

Regulatory & Legal Risks

  • Discrimination and Redlining Litigation
  • Accessibility Non-Compliance
  • Data Privacy Violations

Market & Financial Risks

  • Loss of Untapped Markets
  • Reputational Damage from Exclusion
  • Poor Customer Loyalty

Product & Communication Risks

  • Inaccessible Product Design
  • Digital Divide
  • Inadequate Crisis Response

Responsible Investment (R)

Responsible investment funds.

Reputational & Integrity Risks (Greenwashing)

  • Greenwashing Litigation
  • Fiduciary Duty Challenge
  • Misalignment of Values

Regulatory & Legal Compliance Risks

  • Inconsistent ESG Classification
  • Lack of Standardized Data
  • Active Ownership Failure

Financial & Investment Risks

  • ESG Performance Risk
  • Stranded Assets
  • Concentration Risk

Shared Value Initiative (SVI)

BNP Paribas Cardif efforts in CSR - dedicated portion of premium supports relevant social or environmental causes.

Reputational & Trust Risks (Cause-Washing)

  • Misleading the Customer (Cause-Washing)
  • Misalignment of Corporate Actions
  • Scandal of Partnered Cause

Regulatory & Legal Risks

  • Transparency and Disclosure Violations
  • Contractual Misrepresentation
  • Accounting and Governance Scrutiny

Operational & Financial Risks

  • Inconsistent Initiative Funding
  • Ineffective Impact Measurement
  • Competitive Disadvantage

BNP Paribas Cardif will be able to evaluate the degree of alignment between the specific features, terms, and risk profile of the insurance product and organization's four risk criteria, which scoring will determine the product's compliance level.

How It Works

3-Step Process

How It Works

1

12 Core Indicators

Three quantifiable, binary (Yes/No) indicators for each of the four ESG criteria.

2

Weighted Alignment Score

Strategic weights applied to sub-scores to determine Total ESG Alignment Score (out of 100).

3

Compliance Rating

Immediate Final Compliance Rating based on pre-defined risk thresholds.

ESG Survey Tool

Interactive questionnaire interface for ESG risk assessment

Tool Benefits

Customize, control, and align with BNP Paribas Cardiff's ESG requirements
Develop proprietary ESG scoring model for Cardiff's specific lines
Ensure adherence to Group's risk appetite
Standardized compliance assessment and product alignment verification

Implementation Timeline

5 Phases • 8 Weeks

Foundation & Criteria Definition

2 weeks

Define 4 ESG criteria, design indicator matrix, set strategic weights, define risk thresholds

System Integration & Data Sourcing

2 weeks

Data sourcing strategy, internal process integration, tool development, training

Product Assessment & Scoring

2 weeks

Indicator status determination, calculate criterion sub-scores, final alignment score

Underwriting & Pricing Decision

2 weeks

Risk vetting against thresholds, mitigation planning, pricing & product labelling

Ongoing Process

Review & Improvement

Regulatory reporting, annual weighting review, indicator relevance check

Continuous monitoring and improvement of ESG risk assessment framework

Key Stakeholders

5 Main Stakeholder Groups

Key Stakeholders

BNP Paribas Cardif Executive Committee

Role: Sponsor and approver

Impact: Highest Impact (Go/No-Go)

Project Team

Role: Define indicators, adopt scoring tool

Impact: Operational success depends on adoption

ESG Compliance Team - Paris

Role: Provider of mandatory ESG data

Impact: Data quality determines scoring mechanism

PAC (Project Approval Committee)

Role: Review and authorize new products

Impact: Highest Operational Impact

BNP Paribas Cardif Clients

Role: Drive market demand for sustainable products

Impact: Demand validates project financial benefit

Financial Savings (Quantifiable)

  • Lower Cost of Capital: Attract ESG-focused investors
  • Market Share Gain: Optimized pricing for green products
  • Operational Savings: 5-10 hours saved per product approval

Strategic Benefits (Non-Financial)

  • Risk Resilience: Portfolio alignment with future regulations
  • Competitive Advantage: Launch SFDR-aligned products (Article 8 & 9)
  • Regulatory Trust: Clear, auditable, transparent scoring
  • Internal Alignment: Unified ESG language across departments

Risk Assessment

6 Key Risks with Mitigation Strategies

HighMedium

Lack of Materiality Consensus

Mitigation: Pre-mortem meeting with senior stakeholders to determine weights and risk tolerances

HighMedium

Greenwashing Exposure

Mitigation: Benchmark indicators against leading financial standards (EU Taxonomy, SFDR, NZAOA)

HighHigh

Data Scarcity/Quality

Mitigation: Define data requirements early, validate with Legal ESG Team Paris

MediumMedium

IT Integration Failure

Mitigation: Agile development approach with frequent integration testing

MediumMedium

Underwriter/Actuar Resistance

Mitigation: Training and commission incentives, demonstrate value-accretive process

HighMedium

Regulatory Change

Mitigation: Design scoring model with modular flexibility for quick updates

Financial Impact

Cost vs. Benefits Analysis

Implementation Cost

Team Hours (5 people, 20% allocation)320 hours
Project Duration8 weeks
Daily Commitment per Person1.6 hours/day (20% of 8-hour day)
Hourly Rate (Bulgarian Market)9.61 - 42.67 BGN/hr
Total Estimated Cost (BGN)3,076 - 13,655 BGN
*Based on Bulgarian salary range: 1,665 - 7,391 BGN/month
*Excludes overhead costs (taxes, benefits, social contributions)

Potential Savings

Lower Cost of CapitalAttract ESG-focused investors
Market Share GainOptimized green product pricing
Operational Savings5-10 hours per product approval
Largest Quantifiable Saving€500K - €5M
Avoiding potential fines for greenwashing or misreporting under SFDR

Get in Touch

Ready to implement ESG risk integration?

Project Team

PMI Student Hackathon: Projects Beyond Potential

AD

Asie Damyanova

Student UNWE

NG

Nikolay Goranov

Student Sofia University

ET

Emil Tsvetanov

Student Sofia University

BNP Paribas Cardif ESG Risk Integration

Innovating the way we Move, Learn and Adapt