Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Risk Management
• Governance

Environmental Achievements

• Replaced desktop computers with laptops, reducing carbon emissions by approximately 2,000 metric tons per year.

Social Achievements

• Raising awareness among employees about environmental sustainability and promoting internal challenges to reduce carbon emissions.

Governance Achievements

• Management-level Enterprise Risk Management (ERM) Committee identifies climate change-related risks and mitigation strategies, reviewed with senior management and the Risk and Compliance Committee of the board of directors.

Climate Goals & Targets

Environmental Challenges

• Most offices are leased, making it difficult to obtain exact information regarding electricity and gas use.
• Significant reductions in carbon footprint depend on the availability of renewable energy in offices or technological advancements.

Mitigation Strategies

• Estimated emissions using square footage of offices and average costs for electricity and gas per square foot.
• Exploring realistic and sustainable ways to directly impact corporate carbon footprint.
• Encouraging energy-efficient lights and motion sensors in offices.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol’s Corporate Accounting and Reporting Standard

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Santa Fe office entirely powered by solar energy
• Reduced carbon footprint through proximity to major transportation hub and employee initiatives like treadmill/bike desks

Social Achievements

• Named one of the World’s Most Ethical Companies® for the tenth consecutive year by the Ethisphere® Institute
• 100% score on the 2021 Human Rights Campaign Foundation’s Corporate Equality Index
• Gallagher Summer Internship Program employing over 450 interns annually
• Extensive community volunteer work totaling 112,706 volunteer hours (2017-2018)
• Various partnerships supporting diversity and inclusion initiatives (Special Olympics, Premiership Rugby, Girl Up, etc.)

Governance Achievements

• CEO signed the CEO Action for Diversity & Inclusion Pledge
• Corporate, divisional and regional inclusion and diversity committees

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• World’s Most Ethical Companies® (Ethisphere® Institute)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Inflation
• ESG Strategy Integration

Climate Goals & Targets

Environmental Challenges

• Increased severity and frequency of natural catastrophe events, particularly secondary perils.
• Climate change influence on event behavior and impacts.
• Inflation and social inflation driving up loss costs.
• Protection gap (61% of global disaster losses uninsured).
• Challenges in accessing capital for reinsurance.
• Concerns regarding modeling adequacy and climate change impact on risk.

Mitigation Strategies

• Dedicated analytical, product, and practice support to clients.
• Partnerships and collaborations with institutions.
• Investment in solutions targeting physical, transition, and liability ESG risks.
• Policy reform (e.g., Inflation Reduction Act in the US, European Green Deal).
• Innovation in reinsurance structures (e.g., parametric triggers, captives).
• Higher retentions and restructured programs to improve profitability.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Drought
• Wildfires
• Heat Waves
• Tropical Cyclones
• Severe Convective Storms

Transition Risks

• Regulatory changes
• Market shifts
• Portfolio decarbonization
• Carbon accounting

Opportunities

• Development of climate-resilient products and services

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced Scope 1 emissions by 13% since 2019 and Scope 2 emissions (market-based) by 28% since 2019.
• Achieved 67% use of renewable energy across offices.
• Launched a sustainability champion's network.
• Engaged supply chain to better understand Scope 3 emissions.
• Delivered efficiency projects across real estate portfolio.

Social Achievements

• Delivered 7,930 volunteering hours.
• Introduced a Gallagher Gives Back Policy.
• Donated £746,480 to UK charities and community groups.
• Awarded a Platinum Payroll Giving Quality Mark accreditation.
• Launched I&D strategic goals for UK broking business.
• Introduced I&D development opportunities, including the Women’s Development programme.
• Reverse mentoring scheme focused on race and ethnicity in the UK broking division.

Governance Achievements

• Rolled out Introduction to the ESG e-learning module.
• Implemented ESG attestation for 23 critical suppliers.
• Strengthened charitable donation governance for Gallagher Gives Back.
• Trained colleagues in procurement, legal, recruitment, and ESG on modern slavery.

Climate Goals & Targets

Environmental Challenges

• Understanding and reducing Scope 3 emissions, particularly from purchased goods and services and business travel.
• Improving the accuracy of environmental data collection.

Mitigation Strategies

• Analyzing data from the supply chain to make informed decisions and partner with suppliers to reduce emissions.
• Improving the accuracy of energy reporting by engaging with landlords and energy suppliers, and planning to roll out sub-meters.
• Implementing dedicated waste engagement programs and training colleagues to increase reuse and recycling rates.
• Implementing various measures to reduce the environmental impact of business travel, including promoting alternatives and encouraging the use of sustainable providers.

Supply Chain Management

Supplier Audits: 23 critical suppliers underwent ESG attestation.

Responsible Procurement

• Supplier Code of Conduct
• ESG attestation

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI, UNGC

Certifications: REGO, Platinum Payroll Giving Quality Mark

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 13 (Climate Action)
• Goal 17 (Partnerships for the Goals)

Various initiatives contribute to these goals, including renewable energy use, community investment, diversity and inclusion programs, climate risk management, and partnerships with various organizations.

Sustainable Products & Innovation

• Parametric insurance products

Awards & Recognition

• Platinum Payroll Giving Quality Mark
• Sports Equality Diversity & Inclusion Award (Project Rugby)

Environmental Metrics

ESG Focus Areas

• Climate Change

Climate Goals & Targets

Environmental Challenges

• Loss development uncertainty in industry event analysis
• Social inflation impacting event loss behavior
• Challenges in accurately quantifying Scope 3 emissions

Mitigation Strategies

• Using accepted agencies like Verisk's PCS for initial market impact gauge
• Investment strategies involving retrocession contracts, aggregate reinsurance covers, and ILS funds
• Partially scaled-down SEC rules on climate-related disclosures

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Wildfires
• Drought

Transition Risks

• Regulatory changes
• Market shifts

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Human Rights
• Supply Chain Ethics
• Just Transition

Social Achievements

• Several brands are taking visible action against unacceptable working conditions and exploitative labor practices, though the overall impact is debated.
• Companies like Nestlé, Unilever, Ikea, Starbucks, Adidas, Levi Strauss & Co., and Apple have implemented initiatives to improve worker well-being, responsible sourcing, and supply chain transparency.

Governance Achievements

• Increased focus on due diligence processes and compliance with local regulations and human rights performance metrics.

Climate Goals & Targets

Environmental Challenges

• Interconnected nature of the global economy makes ignoring social impact of operations difficult.
• Supply chain resilience challenges with onshoring and reshoring solutions being explored.
• Ethical challenges in ensuring fair wages and acceptable working conditions globally.
• Difficulties in achieving full supply chain transparency.
• Decarbonization efforts sometimes conflict with human rights improvements (e.g., EV battery production).
• Child labor remains a persistent problem in industries like cocoa.
• Modern slavery and forced labor are deeply entrenched in many supply chains.
• Conflict minerals pose significant ethical challenges.
• Difficulties in aligning corporate purpose and core values with a coordinated approach to set a fair minimum wage.
• Worker protests and strike actions highlighting wage demands, worker rights, and better working conditions.

Mitigation Strategies

• Tighter due diligence processes and supplier compliance.
• Collaboration with stakeholders (NGOs, industry peers).
• Contractual clauses requiring supplier compliance with human rights obligations.
• Direct action to improve underperforming suppliers' ethical performance.
• Ongoing performance monitoring and severing ties with non-compliant suppliers.
• Broadening due diligence to include the extended supply chain.
• Local community partnership and engagement.
• Supply chain audits to ensure full compliance.
• Capacity-building programs, training, and supplier development initiatives.

Supply Chain Management

Responsible Procurement

• Implementing tighter due diligence processes
• Contractual obligations requiring supplier compliance
• Regular audits and on-the-ground assessments

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), OECD Due Diligence Guidance for Responsible Business Conduct, Global Reporting Initiative (GRI) Standards, EU Regulation (CSDDD, CSRD, SFDR)