New climate-related disclosure rules to be released by the US Securities and Exchange Commission next month are leaving people “scratching their heads”, according to Jeff Palmadesso, EY Americas insurance assurance leader.

In a draft proposal a year ago, the SEC said it would require public companies to spell out their own direct and indirect greenhouse gas emissions, and emissions from suppliers and customers.

Speaking in the Future of Finance panel at the Bermuda Risk Summit 2023 yesterday, Mr Palmadesso said: “The political side of things is very charged and there is a lot of emotion going into it. When you look at the granularity of the carbon emissions gas and that type of stuff they are asking for, it is a lot.”

But Alex Huang, chief risk officer at Sun Life International, said “no one had a crystal ball” on exactly what the rules will be.

Another panellist, William Stone, chief executive of SS & C Technologies, said: “I have had ESG beaten into my head for about four years.”

He said it was a balancing act between meeting ESG demands and meeting the needs of employees, clients and shareholders.

“You have to make sure, on the ESG side of things, you are efficient at it, otherwise you are taking all kinds of corporate resources and will not generate any more sales or profits,” he said. “It might generate some halos — we want those — but shareholders get tense if you do not get your numbers.”

Mr Stone said you have to make sure there is an analytical add-on.

“Without that kind of balance you get tipped, and it can be very difficult to recover from that,” Mr Stone said. “It is something to study and to pay attention to, and deliver on, and deliver on it in a way that everyone would say that seems like a pretty wise way to attempt to satisfy everyone in the game.”

Ms Huang said in 2021, 90 per cent of S&P companies had started reporting their ESG risks in their statements.

“We see a wide range of reporting, qualitatively and quantitatively,” she said.

Panellists also touched on the need to attract younger people to the industry. Much had been written recently about a talent gap in the insurance industry with many veteran insurers about to retire, and not enough new blood coming into the industry.

“People who would have become actuaries are becoming data scientists,” said Justin Brenden, chief actuary at Sirius Point. “We need to show young people that these are really interesting and great careers.”

Mr Brenden said he was spending more time on recruitment and talent selection.

“One thing we are not collectively doing enough of is training and developing apprenticeships,” he said. “A lot of that is falling by the wayside through Covid-19 and cost-cutting. I am finding myself making a deliberate effort to make sure this is happening.”

Mr Palmadesso said a lot of young people were less interested in the minutiae of an audit, but were very interested in innovation. He said they will willingly work longer hours to automate a system to gather useful data.

“I find it fascinating how we are saying, on one hand, we are having challenges with our youngest workforce and, on the other hand, saying that we need to automate and get this data in a fashion that is usable. We have to use the two in alignment. They are staring at us as opportunities.”

He also said it was the youngest people in the industry who were partly driving a move back to the office after the pandemic.

“They want to be back in front of leaders to learn,” he said. “They are driving a huge shift to bring people back.”

But he said older people were quite happy to be sitting at home working remotely because it was more flexible for them.

“But they also recognise the need to be back in this mentoring role,” he added.

The panel was moderated by Michelle Seymour-Smith, non-executive director of Conduit Re.