Podcast 23 mins
Better Being Series: Understanding Burnout in the WorkplaceAon's Better Being Podcast
Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.
Aon Insights Series Asia
Expert Views on Today's Risk Capital and Human Capital Issues
Aon Insights Series Pacific
Expert Views on Today's Risk Capital and Human Capital Issues
Aon Insights Series UK
Expert Views on Today's Risk Capital and Human Capital Issues
Construction and Infrastructure
The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.
Cyber Labs
Stay in the loop on today's most pressing cyber security matters.
Cyber Resilience
Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.
Employee Wellbeing
Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.
Environmental, Social and Governance Insights
Explore Aon's latest environmental social and governance (ESG) insights.
Q4 2023 Global Insurance Market Insights
Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.
Regional Results
How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.
Human Capital Analytics
Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.
Insights for HR
Explore our hand-picked insights for human resources professionals.
Workforce
Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.
Mergers and Acquisitions
Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.
Navigating Volatility
How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?
Parametric Insurance
Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.
Pay Transparency and Equity
Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.
Property Risk Management
Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.
Technology
Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.
Top 10 Global Risks
Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.
Trade
Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.
Weather
With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.
Workforce Resilience
Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.
Impact Report 2023
Environmental Impact
Better decisions for a better world. Explore Aon's environmental, social, and governance impact.
Introduction
Aon is committed to driving commercial and societal action to help the transition to a net-zero economy and improve resilience in a changing climate. Our environmental, social and governance strategy is focused on three major areas of environmental impact:
- Decarbonization and sustainability efforts and investments
- Climate solutions for clients to help assess, quantify and address risk, powered by our data, analytics and expertise
- Global collaboration, partnerships and philanthropy
Our Path to Net Zero
Aon remains committed to achieving net-zero greenhouse gas emissions by 2030, and our targets were approved and validated by the Science Based Targets initiative (SBTi) in line with a 1.5-degree pathway. We publish our progress through an annual report to the Carbon Disclosure Project.
Our emissions footprint is derived primarily from our supply chain, real estate and travel, and we have continued to focus our efforts across those areas, including:
- Deploying our sustainable sourcing strategy — enabled by Aon Business Services — through which we work closely with suppliers to understand their existing carbon reduction commitments and strategies and encourage them to take steps toward those goals.
- Eight of our largest 10 suppliers by spend have targets set with SBTi.
- Because many of our clients are also our suppliers, we see a significant opportunity for mutual collaboration.
- Reducing the space we use and improving energy efficiency across our real estate portfolio and technology footprint, including investments in renewable energy.
- Managing our travel and commuting footprint through our Smart Working strategy and investing in electric vehicle charging stations and a program to access sustainable aviation fuel certificates.
These efforts are aligned with our Environmental Policy, which reinforces our pledge to pursue sustainable business solutions and provides a global framework and controls for more responsible operations. As part of this process, Aon has completed a physical and transition risk analysis of our environmental strategy, in which we looked at the current and long-term climate risks in the areas where we operate. For additional information, please see our Task Force on Climate-Related Financial Disclosures (TCFD) and Task Force on Nature-Related Financial Disclosures (TNFD) materials.
Jump to Section
Impact Story - Sustainable Aviation Fuel Pilot Program
In 2022, Aon joined American Express’ Global Business Travel (Amex GBT) and Shell Aviation’s SAF sustainable aviation fuel pilot program to reduce the impact of air travel emissions.
The program uses Amex GBT’s global client base to aggregate global demand for SAF with Shell Aviation supplying SAF for the aviation fuel network. Aon and other companies that participate in the pilot have access to a sustainable-aviation blockchain book-and-claim solution, which provides access to SAF certificates and attributes. SAF is currently available at certain airports. However, the blockchain solution means that companies can purchase and use SAF indirectly.
In October 2023, Los Angeles International Airport began to use Aon’s SAF, which was made from animal fat/beef tallow and provided a 75 percent emissions reduction compared to traditional jet fuel.
Over time, we believe our investment will help advance a broadly scalable solution – one that requires collaboration with suppliers and clients to move toward sustainable alternatives. As an early corporate adopter of this program, Aon is investing to ensure a sustainable pipeline of SAF is available to reduce travel emissions now and in the future.
Supplier Sustainability
We recognize the critical role our suppliers play in helping Aon reduce Scope 3 emissions associated with our purchased goods and services. Our Sustainable Procurement Program seeks to engage and support our suppliers in their own decarbonization journey while setting measurable targets for — and tracking the progress of — our enterprise-level suppliers.
In 2023, Aon accelerated our Sustainable Procurement capabilities. We embedded sustainability into our category management strategy, working with top emitting suppliers to understand and advance their environmental targets and reporting. In addition to our Supplier Code of Conduct, we’ve added contractual exhibits that work to promote corporate sustainability by communicating our commitment to reducing greenhouse gas emissions. We expect our suppliers to reduce their environmental impact, set environmental targets and regularly provide progress reports to our firm.
Beyond environmental sustainability, we focus on inclusion and diversity in our supplier approach, which is fundamental to our belief that diverse backgrounds and experiences drive the best insights, advice and outcomes. Through our integrated supplier and business diversity efforts, over seven percent of our U.S. addressable spend was with diverse suppliers in 2023. For more than four decades, economic inclusion activities have evolved from being compliance-driven to being a fully collaborative strategy for doing business and meeting organizational financial objectives. Aon serves as a national corporate member and annual conference sponsor of the National Minority Supplier Development Council and Women’s Business Enterprise National Council.
Learn more from Aon’s Diversity Solutions Economic Impact Report.
“Recognizing the need for greater resiliency in our supply chain, Aon continues to drive new innovation and ideas for collaboration with our supply base,” said Melissa Warneke, head of Sustainable Procurement for Aon. “We’re rethinking how we respond to our business needs through a lens of reducing our environmental impact and risk, thereby accelerating our transition to net zero.”
Historically, we’ve taken steps to centralize our third-party spend so that more than 90 percent of spend is now managed through preferred channels. This contributes to greater efficiency and transparency, which enables us to manage our procurement spend more effectively with respect to our overall goals while also focusing on our emission reduction target. Within Aon Business Services, we continue to digitalize and automate processes, achieving greater efficiency and accuracy and client satisfaction — all while reducing emissions. As one of the first signatories to the Sustainable Markets Initiative Insurance Task Force’s Global Supply Chain Pledge, we continue to aim to drive greater sustainability across insurance industry supply chains.
“Creating winning partnerships is extremely important to us,” said Melissa Salo, chief procurement officer for Aon. “It means that we can work together to have a greater impact and build a clearer path to a more sustainable future.”
Our Real Estate and Smart Working Strategy
Our approach to Real Estate focuses on providing colleagues with agile space in an open floor plan. In many cities, we’ve consolidated from multiple offices to a single location to better align with our Aon United strategy and we’re also sourcing green energy, looking for energy efficiency improvements and assessing other opportunities to reduce our physical impact.
In 2023, in collaboration with Aon Business Services, we continued to use electronic invoicing and purchase orders, badge printing and electronic signatures. Collectively, these initiatives have saved numerous resources:
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25M
sheets of paper
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577K
kilograms of CO2e
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11.6M
liters of water
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2.8K+
trees
We are also reducing our impact by moving from hard copies of Certificates of Insurance and Policies to e-delivery. In 2023, e-delivery helped achieve paper savings that amounted to 433 trees, 1.4 million liters of water and 177,082 kilograms of CO2e.
As we expand the use of green materials in our offices, we are working with partners to improve purchased product life cycles and responsible end-of-use equipment practices. We have moved from ownership to leasing of hardware through our third-party partners — which enables end-of-life recycling for printers, print cartridges and laptops. Our office products are increasingly refurbished to reduce waste. We also donate to local communities to extend the life cycle of materials and products.
For example, in Germany Aon donated end-of-use laptops to Munich’s Gute Tat foundation, which provides and supports the education of disadvantaged children and refugees. Also, in the U.S., Aon has donated extensively to the Chicago Furniture Bank. Hundreds of items such as filing cabinets, office chairs and tables will be redeployed through various channels to support those in need. Items such as filing cabinets will have new life as dressers for storing clothing. Local food banks will also use our furniture to provide extra storage capacity for food distribution.
Additionally, Aon’s Smart Working strategy is designed to maintain the highest levels of client service and collaboration among colleagues and support our Aon United culture and values while enabling more purposeful decisions regarding travel and real estate. In our most recent all-colleague engagement survey, this initiative was cited as a key driver in engagement and wellbeing. Colleagues and managers work together to determine the best option for working, whether that be remote, in the office, at a client’s office or across all three.
By investing in the virtual technology to make this seamless and effective, Smart Working enables our firm to make progress toward our net-zero ambitions while connecting our global footprint and bringing the breadth and depth of our expertise to each other in more efficient, modern ways. Smart Working also allows our clients to choose how we connect with them and reduce their own footprints with more thoughtful decisions on travel.
Our Colleagues in Action
Aon colleagues play an integral role in our approach to decarbonization and, in 2023, we continued our education efforts to help colleagues learn more about environmental impacts and how our firm and our colleagues are making a difference. In 2023, our global colleague network regularly shared news of how they are making an impact around the globe and grew by almost four times. We also continued a quarterly educational webinar series that informs colleagues about Aon’s progress toward our net-zero commitment, client climate solutions and colleague accomplishments.
In the last quarter of 2023, we launched “Aon’s Greenest Colleague of the Week” awards. We received nominations from around the globe for the great work happening in local offices, including a campaign in Mexico to collect plastic lids to help local low-income children with cancer and responding to client requests for information on sustainability. Throughout the year, we continued to expand the program by formalizing a global Sustainability Engagement Network, which includes representation from all regions and is sponsored by our global head of investor relations and ESG. This group shares thought leadership across the globe and works locally to implement and communicate sustainability solutions.
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Impact Story - Aon Japan’s Go! Blue Works for Cleaner Oceans
It was a visit back in 2018 to Japan’s Okinoerabu Island in southern Japan that inspired our CEO of Japan, Jake Yamamoto, to educate and promote action to clean up the world’s oceans of plastic waste.
On the trip, Yamamoto met the Sao family, who spent every morning before school and work cleaning up the island’s coastline — something they had done every day for six years. “I was really impressed,” said Yamamoto. “At same time, I recognized that the problem of ocean plastic debris would not be solved by these individual actions, nor would it be solved if it is a focus only in Japan. This challenge can be addressed at scale only if everyone in the world is aware of and taking action.”
In 2019, Yamamoto – working with colleagues across Japan – launched Go! Blue, a campaign to help and encourage colleagues and communities to protect the oceans. The campaign soon secured partnerships with external organizations including Sophia University, the Association for Promotion of International Cooperation, and the Japan Federation of Catholic Schools.
In the four years since the launch of Go! Blue, Aon colleagues have taken part in a number of activities, including encouraging the use of eco-friendly bags, tying up with schools and colleges to learn together with students about ocean plastic waste and launching a children’s “Trash Art” competition.
In 2023, in addition to running the Trash Art competition, Go! Blue built an online tool to encourage the use of eco-friendly products. They also brought together 40 Aon colleagues and family members to work alongside local communities and organizations in several beach clean-up sessions.
The Go! Blue Team’s ambition to spread this impact around the world also saw progress as Aon offices in Hong Kong, Taiwan, Singapore, Indonesia, Australia, Vietnam and India all now either run or are planning their own related projects.
“Few of the world's largest companies have offices in more than 120 countries and territories like Aon,” said the Team. “We thought that if all of Aon's employees and families were aware of this issue, we would be able to spread the Sao family’s message to the rest of the world.”
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Impact Story - Monitoring the Impact of Natural Catastrophes in Spain
In Spain, the Aon Spain Foundation, a nonprofit body formed by a group of Aon colleagues, works to identify, measure, understand and help prevent damage from natural catastrophes.
At the eighth symposium of the foundation’s Catastrophe Observatory, held at the Engineering Institute of Spain in November 2023, the foundation published its annual Barometer of Natural Catastrophes. The report analyses the costs and causes of the biggest disasters in Spain in 2022 and included indexes and metrics of critical infrastructure resilience and social vulnerability.
As part of its work to investigate and prevent natural catastrophes, the Aon Spain Foundation also carries out research work and finances academic research on disasters. The advisory council of the foundation’s chair brings together experts in engineering, insurance, economics and emergency intervention to advise on study and research work. The foundation has so far helped finance five doctoral theses, including research on man-made forest fires, the effects of natural disasters and pandemics on migration, the management of health crisis due to pandemics and epidemics and the improvement of the resilience of critical infrastructures and cities.
Climate Solutions for Clients
As a firm, Aon is a leading provider of data, analytics and expertise that continue to grow in relevance for clients around the world as they become increasingly affected by climate change and shifts in regulations – as well as the magnitude of the challenge and its potential.
Our focus is on helping our clients prepare for and respond to the challenges posed by the impacts of climate change and unlock opportunities driven by the transition to a lower-carbon economy.
Quantifying Physical Risks to Build Resilience
Effectively quantifying risk is a key step in managing it, and we’ve developed solutions to help our clients understand the scale and nuance of climate risk. Our ImpactOnDemand platform gives clients real-time alerts about potentially catastrophic climate events. At the same time, our catastrophe modeling and climate projections, driven by our collaboration with academic institutions, gives organizations an informed view of future risks.
By understanding the size and type of the risks they face, clients are then able to prioritize and understand how their approach should be part of their broader business strategy. We contribute to that process with risk mitigation and transfer solutions – including parametric insurance and catastrophe bonds – that are designed to help clients bridge the protection gap associated with physical climate risks. Our work in helping our clients with their reporting and disclosure also supports clients as they integrate climate risk into their decision-making processes.
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Impact Story - Evaluating ESG Risks in the Supply Chain
Procurement and sustainability professionals are under more pressure than ever to manage supply chain risks and take part in meeting their company’s climate targets. For most companies, the bulk of ESG footprint and greenhouse gas emissions lie within the supply chain. Aon’s ESG Supplier Risk dashboard uses best-in-class data providers to provide transparent metrics on potential ESG-related supply chain risks – including climate, emissions, and human rights exposures. Founded on Aon’s robust risk management expertise, the Supplier Risk Dashboard allows you to visualize data, set up ongoing monitoring quickly and prepare for upcoming ESG regulations.
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Impact Story - Helping Clients Understand the Impacts of Biodiversity
Organizations and investors have recently paid considerable attention to developing strategies around climate risk. However, they have yet to put the same level of focus on biodiversity.
To approach climate risk efforts more holistically, companies will need to view their initiatives through both emissions- and biodiversity-based lenses. Aon’s Earth and Nature Risk Assessment helps companies identify key biodiversity impacts on their business and supply chains.
The data-driven model helps clients to understand the risks associated with temperature, water, land, pressures on biodiversity, indigenous populations, socioeconomic factors, hazards and future climate risks.
The Earth and Nature Risk Assessment helps organizations develop strategies for short- and long-term risk mitigation and address the requirements of the EU’s Corporate Sustainability Reporting Directive and the TNFD.
Reducing the Costs and Volatility of Transitioning to Net Zero
In helping our clients transition to lower-carbon practices, Aon prioritizes cost reduction, risk management and strategies to unlock new investment opportunities. Aon’s focus on identifying potential risk exposures helps clients mitigate risks as they invest in well-established and emerging forms of renewable energy, including green hydrogen, long-term energy storage, electric vehicles and carbon capture and storage. Our work across multiple dimensions of risk — including reputation, litigation, and other transition risks — provides our clients with the guidance they need to reduce volatility, increase bankability and responsibly transition assets and portfolios from brown to green energy.
Impact Story - Helping Clients Identify Extreme Weather Risk
In response to the increased frequency of severe weather events, regulators around the world are assessing climate vulnerability and requiring disclosure from financial institutions.
A bank in the Asia-Pacific region reached out to Aon to help it build its knowledge and resilience in the face of extreme weather and volatility from climate change. To help the client develop a better understanding of the impact of future physical climate and transition risk, teams across our Risk Capital capability worked together to build a comprehensive database of risk exposure.
The client now uses our climate and hazard data and climate advisory expertise to assess their loan book, with a plan to integrate this data into their credit risk modelling capability in the future.
Innovative Research and Solutions
As part of our effort to help clients advance their ESG strategies and objectives, we’ve developed thought leadership and execution capabilities related to captives that help clients address, manage and finance risk.
Our report, “Using a Captive Insurance Company to Drive Positive ESG Outcomes,” provides guidance for using captive insurance to support sustainability objectives through underwriting, investment, risk management and risk improvement, societal resilience and transition support. The report also discusses ways to embed ESG and sustainability concerns in a captive insurance strategy, including best practices, key considerations for organizations and captive boards and a captive ESG model. Our additional thought leadership on captives discusses considerations such as underwriting strategies, risk retention and determining premiums.
Aon is a member of the United Nations Environmental Programme Finance Initiative’s (UNEP FI) Principles for Sustainable Insurance initiative, which offers a framework for addressing ESG in insurance, and outlines ways a captive insurer can support sustainability.
Unlocking New Growth Opportunities
Aon supports its clients in the transition to a lower carbon economy, which can create new growth opportunities and a more sustainable future. A comprehensive set of solutions – including bringing together risk and capital to enable decarbonization and clean technology – can help our clients innovate and advance their ESG goals.
Aon is helping public and private entities to accelerate capital flows for low carbon transition in a number of areas, including:
- Transition Performance Index (TPI) is designed to assist clients in hard-to-abate sectors secure cover over the course of their shifter to greener energy. By leveraging data from public sources and Aon’s proprietary analytics, TPI allows underwriters to better understand the impact of client’s actions to become greener and justify providing risk capital.
- Technology Performance Guarantees help early-stage businesses secure debt financing by insuring against a shortfall in renewable energy production caused by an underperforming technology. This, in turn, helps smooth cash flow volatility for a project, helping lenders feel more confident that debt payments will be made on time and on target.
- Tax credits are a widely used incentive to encourage investment in renewable energy projects. Tax Credit Insurance for Renewable Energy Transactions is a solution that allows tax equity investors, developers, guarantors and lenders manage any potential tax liabilities.
- Carbon Capture and Storage Solutions help transportation and storage companies — as well as emitters using abatement technology — manage new and emerging exposures such as CO2 leakage. This gives projects greater access to capital investment as well as supporting regulatory obligations and stakeholder net-zero targets.
Aon is also playing a key role in helping the insurance industry formulate a consistent, forward-looking pricing model for new risks and large-scale complex projects. Speaking at Climate Week, Carol Stark, Aon managing director and North America practice leader for Renewable Energy, highlighted the latest developments: “A lot of stakeholders are coming together to help owners and developers de-risk their projects. When the industry comes together like it has, and other stakeholders realize the impact, they’re going to get more involved and behind renewable energy.”
Responsible Investing
For many clients, a key enterprise objective is to focus on more responsible, sustainable investment amidst an evolving regulatory landscape with the potential for long-term value creation and risk management. We signed the Principles for Responsible Investing in 2009 and our UK Advisory and Fiduciary Wealth businesses are signatories to the UK’s Stewardship Code.
Our tools help clients embed their values and goals in their portfolios, and we would highlight two scalable offerings:
- RI-360: Now in its fifth version, this dashboard helps clients make better decisions about climate risk, ESG and stewardship and better understand the risks involved in their investment strategies.
- Climate Change Risk Modeling: Leveraging Aon’s extensive asset allocation and weather-modeling capabilities developed in partnership with the Institute for Sustainability Leadership at the University of Cambridge, our climate risk scenarios help clients test the resilience of their investment strategy to climate-related shocks and supports their net zero goals.
Impact Story - Aon Fixed Income Fund Aimed at Mitigating Climate Change
In January 2022, we launched Aon’s Sustainable Multi-Asset Credit Fund, providing clients with exposure to a diversified fixed income portfolio that works to align with the United Nations Sustainable Development Goals and provide financing to companies working to mitigate climate change.
Aon’s Sustainable Multi-Asset Credit Fund currently has nearly £375 million ($475 million) under management and combines our long and successful track record in fixed income investing with our extensive expertise in responsible investing. It will be the second fund on our platform – following the Global Impact Equity Fund, which has nearly £600 million ($750 million) under management – that goes beyond integrating ESG principals into the investment process.
Global Partnerships
Addressing climate risk requires a coordinated, targeted effort across geographies, governments, businesses and other organizations. We have convened high-impact partnerships and collaborations that are helping to identify solutions to some of the critical barriers. For the United Nations Climate Change Conference in 2023— known as COP28 — Aon President Eric Andersen led a team of Aon leaders at the summit to highlight how the private sector has a crucial role to play in the transition to a carbon-neutral economy.
At the conference, Andersen met with private entities and state and government representatives to discuss how Aon can work with them to finance and tackle climate change through insurance solutions.
The Aon delegation saw COP28 as an opportunity for the firm to work closer with clients on climate risk: “We met here with clients we didn’t have before, such as the Red Cross and the World Bank,” said Andersen. “To match them with the private sector has been an evolution. But we understand each other better now.”
Tackling the complex and interrelated challenges of nature and climate change will require a great deal of public-private sector collaboration and cross-industry knowledge exchange. Aon aims to contribute to this evolving space through its contributions to the Taskforce on Nature-related Financial Disclosures data catalyst initiative, the ClimateWise nature and insurance working group, United Nations Environment Programme Finance Initiative, and other relevant forums.
Amplifying our Impact
We partner with organizations that align with our client needs and our capability to help unlock capital and drive better data-driven decisions. Aon invests in partnerships and talent from which we can draw on the expertise of climatologists and risk engineers to help us to evaluate models and assess risk transfer for renewable energy projects and deliver sustainable solutions for our clients. Our collaborations with top climate academic researchers allow us to bring scientific insights to catastrophe impact forecasting, quantification of climate risk in (re)insurer portfolios and better decisions on pricing, investments and exposure management.
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Impact Story - Speeding up the Delivery of Vital Financial Aid
When disaster occurs, a key part of the emergency relief efforts – alongside the delivery of food, shelter and medical assistance – is the swift and efficient delivery of much-needed funds to aid recovery and rebuilding. In 2023, Aon and Lloyd’s of London worked with the International Federation of Red Cross and Red Crescent Societies (IFRC) to launch a ground-breaking financial program to provide a backstop for the IFRC’s Disaster Response Emergency Fund (DREF) – which allocates reliable international, short-term emergency funding to the IFRC’s member countries.
The collaboration between Aon and Lloyd’s protects the DREF from volatility and increases its capacity to effectively distribute funds to those in need.
At the launch of the program, Aon President Eric Andersen said: “The impact of climate is giving rise to an increasing number of natural disasters that are disproportionally affecting underserved communities. At Aon, we are honored to play a role to help protect DREF from volatility and increase its capacity to effectively distribute funds to those in need through our innovative capabilities in matching capital to the risk and the innovation in our industry to address the humanitarian impact from climate-related disasters.”
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Impact Story - Parametric Program to Help Puerto Rico Bridge the Protection Gap
The severity and frequency of natural catastrophes are increasing around the world. Global economic losses from natural disasters in 2023 were $380 billion, 22 percent higher than the 21st century average.
However, only 31 percent of that was covered by insurance, highlighting a growing gap between economic losses and these type of insured losses.
Parametric insurance has emerged as a compelling and unique solution to bridging this protection gap. It provides a different way to think about mitigating risk, especially if conventional products are restricted, unavailable or not meeting an organization's needs. In 2023, Aon announced the placement of a parametric insurance program for the government of Puerto Rico – the single largest program of its kind the U.S. Commonwealth has ever placed.
Designed by Aon’s Risk Capital team, the program would be triggered in the event of a sizable earthquake or hurricane. Puerto Rico would then quickly receive liquidity, enabling its government to focus on rapid recovery and reconstruction.
Aon's data and analytics capabilities made this placement possible, augmented by our deep understanding of public entity demand and risk capital markets.
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Impact Story - Helping Africa’s Farmers Combat Climate Risk
According to the African Development Bank, Africa is home to 65 percent of the world’s uncultivated arable land. However, a lack of effective environmental data scarcity has prevented the expansion of agricultural crop insurance, stunting the growth of the agri-food sector. At the same time, smallholder farmers in sub-Saharan Africa are highly vulnerable to extreme weather events, with only three percent having effective crop insurance.
To help increase crop insurance capacity across Africa, support smallholder farmers’ resilience and accelerate the use of nature-positive practices, Aon announced in 2023 a unique collaboration with the African Development Bank (AfDB), Africa’s premier development finance institution, and Amini, a leading innovator in space technology and artificial intelligence.
Aon will use Amini’s farm-level data to support AfDB’s Africa Climate Risk Insurance Facility for Adaptation in its efforts to develop innovative de-risking solutions and assess and monitor the changing risk environment across the continent. Farmers would then use the data to make better-informed decisions, which will lead to greater resiliency and yield improvements.
On top of this, the collaboration is aimed at helping Aon clients with extensive supply chains or balance sheet exposure to the agricultural sector to better manage the multi-faceted impacts of climate risk.
Impact Report 2023
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Social Impact
We continue to build on actions and programs that support inclusion, workforce wellbeing and civic outreach to build an equitable culture.
Social Impact
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Governance Impact
Our own model is built for transparency and trust, helping us bring our purpose to life and create value for clients and colleagues.
Governance Impact
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Our Impact
We see significant opportunity in both enhancing our own ESG impact and delivering innovative solutions to clients and the wider market.
Our Impact