NFU Mutual has embarked on a significant journey towards sustainability, taking comprehensive steps to address climate change and transition towards a more sustainable future. With a strong affiliation to the farming community, the company’s operations are deeply rooted in rural and non-rural sectors, maintaining a close connection with its members. This member-centric approach ensures long-term relationships, delivering value and supporting communities, contributing to a high renewal rate in their general insurance book.
In 2019, NFU Mutual began formulating its climate transition plan, prompted by the Prudential Regulation Authority’s (PRA) recognition of climate change as a significant financial risk. By mid-2021, a formal climate change strategy was presented to the board, outlining the company’s approach to managing climate risks and opportunities. This evolved into a comprehensive climate change transition strategy by the end of 2021, detailing the company’s net-zero ambitions and pathways to achieve them.
NFU Mutual’s climate strategy is built around four key ESG pillars: protecting rural lives and livelihoods, building healthy communities, ensuring sensible governance, and caring for the environment. Engaging stakeholders, including employees, management teams, and farming customers, was crucial in shaping the strategy. The feedback overwhelmingly prioritised climate change, positioning it as the top focus in NFU Mutual’s ESG strategy.
The UK government’s greening finance strategy and the formation of the Transition Plan Taskforce in 2022 set the regulatory framework for NFU Mutual’s climate actions. The task force aims to establish high-quality transition plans, and NFU Mutual has aligned its efforts with these guidelines. Additionally, the company adheres to mandatory disclosure requirements, ensuring transparency in how they manage financial risks related to climate change.
Developing the climate transition plan involved significant collaboration across all business divisions, emphasising the need to break down silos and create a unified strategy. NFU Mutual faced challenges in ensuring consistency across various disclosures, particularly the Task Force on Climate-related Financial Disclosures (TCFD) requirements. The process also highlighted the importance of governance, balancing transparency with commercial sensitivity, and addressing potential risks of greenwashing.
NFU Mutual’s strategy includes specific targets for reducing emissions within their control, such as buildings, vehicles, and business travel. The company has set ambitious goals: a 25% reduction in emissions by 2025 and a 50% reduction by 2030. Additionally, the investment portfolios aim for a 50% reduction by 2030, with a focus on engaging with firms to encourage sustainable actions rather than divestment.
Looking ahead, NFU Mutual plans to launch its transition plan publicly, both internally and externally, and continue refining the plan based on feedback and evolving regulations. The commitment to supporting a low-carbon economy and maintaining resilience is central to their strategy, aligning with the UK government’s net-zero by 2050 legislation.
