Under the UN Guiding Principles on Business and Human Rights, companies are expected to conduct human rights due diligence to meet the corporate responsibility to respect human rights. The UN Declaration on the Rights of Indigenous Peoples recognizes the rights of Indigenous Peoples to self- determination, territories, and cultural practices, and establishes that entities must seek Free Prior and Informed Consent (FPIC) of Indigenous Peoples related to any projects that may impact their rights.
The Hartford Financial Services (The Hartford) may be exposed to environmental and social risk through its underwriting and financing activities. The Principles for Sustainable Insurance, signed by 135 insurers representing $15 trillion in assets, 1 serves as a framework to address environmental, social and governance (ESG) risks and opportunities. The Hartford is not a signatory. Several companies incorporate ESG in their underwriting practice, including AIG,2 Munich Re,3 and Zurich.4 Allianz,5 AXIS Capital,6 and Swiss Re7 assess FPIC in underwriting. Seventeen insurers have committed not to insure oil and gas projects in the Arctic National Wildlife Refuge (Arctic Refuge) in Alaska, noting potential impacts on Indigenous Peoples, biodiversity, and caribou.8
Projects that may negatively impact the rights, culture, or territories of Indigenous Peoples may face opposition and increase reputational risk. The Hartford is facing public scrutiny over the potential risk associated with the Arctic Refuge. The Gwich’in Steering Committee has written to The Hartford asking it to commit not to insure projects in the Arctic Refuge, to protect its communities, culture, and way of life.9 Investor expectations on Indigenous Rights are increasing, including that companies respect FPIC in business decisions that impact Indigenous Peoples.10
Identification and evaluation of all relevant data or risk factors of an activity or project, including exposure to potential human rights or biodiversity impacts or losses, are necessary to accurately assess risk exposure and appropriately set pricing, coverage, and exclusions. While The Hartford has some environmental commitments and a human rights policy,11 it lacks disclosure on how it evaluates human rights risks, in particular the rights of Indigenous Peoples, in underwriting. This may expose the company to mispricing of risk or failing to identify potential social and human rights risks associated with its business activities, which may lead to increased costs, project cancelations, or negative human rights outcomes.