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Our Approach to Climate Change



Santam recognises that climate change poses serious risks to the stability and quality of human society and the global economy. As Africa’s leading short-term insurer, we have the ability to influence the management of systemic risk associated with climate change. We are committed to building partnerships that reduce risk at source, strengthen capacity, and enhance social and ecological resilience, as well as managing risk through decision-making along the value chain.

Santam was the first African insurer to mobilise the short-term insurance industry in response to increasing climate and weather risk. As part of the global insurance industry, we are formalising our response to increasing climate risk and aligning our initiatives accordingly. This policy statement provides an initial framework for these continuing processes.

Santam group in a changing climate

The Intergovernmental Panel on Climate Change, the world’s leading scientific body on the subject, predicts that local and regional weather patterns are likely to shift, changing the frequency and intensity of precipitation, and contributing to extreme weather events. This will affect ecosystem health, water resources, agricultural productivity and infrastructure, with negative consequences for human safety, nutrition and health. Several scientifically identified planetary boundaries have already been crossed, increasing the likelihood of complex non-linear interactions.

From the perspective of our business, there are two broad categories of climate risk:

These risks are compounded by a lack of institutional and individual adaptive capacity in our African and Southeast Asian markets. In combination, these factors are likely to expand claims for property damage, business interruption and crop failure.

Our strategic approach

Santam operates in the context of earnings volatility and an unpredictable climate, and our business is increasingly required to address complex social challenges. In 2009, we became the first African member of ClimateWise – the global insurance industry’s leadership group driving action on climate change risk. We are a signatory to its principles, which form the basis of this policy statement. These principles and our aligned actions are outlined below.

ClimateWise principles

Reducing environmental impact

In comparison with extractive industries, Santam has a relatively low environmental impact. However, we take our carbon footprint seriously, with measurement, monitoring and actions to minimise our impact.

Santam’s Resilient Investment Fund provides loan finance to businesses that mitigate climate risk at the same time addressing social risks.

Our Investment Committee has thus far allocated R20 million to the fund with the intent to build a bigger fund.

Santam set reduction targets as part of our carbon footprint management across six areas of which carbon emissions, electricity consumption and waste generation is measured, monitored and reported against set targets on an annual basis.

We participate as a business on our carbon emissions through the Carbon Disclosure Project.


Partnering to reduce risk and build resilience

We believe that collaboratively building social and ecological resilience will help us manage our risks at source, build goodwill for the brand and create opportunities to unlock new markets. This aligns with our sustainable insurance approach, which emphasises the importance of early warning systems, preparedness and proactive risk management. Reducing risk and building resilience is a long-term process that involves research-based evidence, multiparty collaboration, capacity building, and knowledge generation and sharing. This we drive through programmes we conduct through local and district municipality structures in targeted high risk areas.

Research-based evidence

We support collaborative research to inform our business strategies and to protect our customers and stakeholders. Projects undertaken in South Africa include the Eden study, the SA Coastal Project, an experimental farm and weather station, as well as a collaborative endeavour to restore degraded catchments and improve livelihoods in Port Elizabeth. Direct research outputs to date include early-warning SMS systems and reporting and monitoring systems. Research has contributed to by-law amendments that mandate inclusion of flood data in development applications, community risk assessments and disaster response plans. We have improved our ability to identify flood and fire-related risk, quantify risk exposure and co-create appropriate risk mitigation responses. We have learnt that proactive management of local risk drivers, such as degraded ecosystems, can offset increased weather risk.

Climate Change affiliation

Santam actively participates in national and international climate risk initiatives. As previously noted, we are members of ClimateWise.

We sit on the steering committee of the United Nations Environment Programme Finance Initiative (UNEP FI) Global Resilience Project and have signed UNEP FI’s Principles of Sustainable Insurance.We are signatories to the 2009 Copenhagen Communique, as well as the Code of Responsible Investing in South Africa.

We have signed memoranda of understanding with several municipalities and the South African Local Government Association, and we collaborate with universities and public research institutions. Through research studies, we have links with the National Disaster Management Centre and the Municipal Infrastructure Support Agency.

Building institutional capacity

We work with local governments to build capacity to manage natural hazards such as fire and floods, with a view to understanding the landscape-level drivers of such incidents, evaluating response capacity but more importantly with government and communities creating adaptation mechanisms to manage these risks. We participate in the Business Adopt-A-Municipality programme, which has expanded to reach more than 50 local municipalities in 10 districts. Our work with these municipalities is based on the principle of creating shared value through partnerships addressing risk collaboratively and building resilience.

Generating and sharing knowledge

Santam is part of the Disaster Resilience Network in South Africa’s Eden District. This collaborative platform helps local officials access information to strengthen the area’s climate adaptation plan, incorporating ecosystem services into disaster risk reduction.

Through our participation in the Global Resilience Project, we have helped deliver an international research publication focused on building disaster-resilient communities and economies, an online global risk map, and recommendations for effective disaster-risk reduction strategies.

Governance and reporting

Santam’s response to climate risk is integrated throughout all levels of the Group as part of our broader commitment to address environmental, social and governance considerations throughout our business. This commitment begins at the strategic level.

The Board understands that increased climate risk poses a material risk to our business. A subcommittee of the Board is responsible for overseeing the response to these risks as part of our sustainability strategy, which is a priority across all business units, supported by the internal systemic risk forum.

We report our sustainability actions to the Johannesburg Stock Exchange Social Responsibility Index Russel FTSE), the Carbon Disclosure Project, ClimateWise, UNEP FI and the National Business Initiative.

Internally, we report on climate and weather risk-related issues through our integrated annual reports and environmental policy. We act in accordance with best-practice guidelines, including King III, Sustainable Development Goals, Global Reporting Initiative G4 guidelines.

Leading the way

Santam is committed to creating shared value. We are building partnerships to reduce risk at source and to forge resilient ecological and social systems. To this end, we will continue to: