Corporate Social Responsibility and Climate Risk Management in Insurance: Focus on voluntary ESG disclosure

In light of the growing significance of insurance companies in the context of accelerated climate change, there is a corresponding increase in interest in sustainability reports. Recently, not only in Europe but also in Korea, accounting standards and mandatory disclosures for sustainability reports has been established in response to the ESG. This study empirically analyzes the relationship between CSR activities and the voluntary disclosure of ESG information. Using data on corporate social responsibility (CSR) activities from 2016 to 2022, our findings indicate that insurance companies with active CSR activities tend to voluntarily disclose ESG reports. Furthermore, consistent results were obtained when individual, aggregate, and PCA variables were used as proxies for CSR activities. ESG reports on climate risk management provide information on the climate risk management of insurance companies. The finding that CSR activities have a positive impact on ESG report disclosure has significant implications from a climate risk management perspective. Additionally, it suggests that CSR activities promote voluntary disclosure, which can contribute to enhancing the social reputation of insurance companies and strengthening climate risk management.