When Canada’s prudential regulator, OFSI, released Guideline B 15 on climate risk, much of the industry conversation centred on governance, disclosure templates and model risk. But behind the technical debates, one piece of the climate equation still wasn’t getting the attention it deserved: the emissions generated by insurers’ own claims supply chains.
For Ross Huartt (pictured), founder and chair of EcoClaim Solutions and former president and CEO of claims consulting firm MBC Group, that gap was becoming impossible to ignore.
“Insurers have a massive blind spot, and it’s clear that sustainability is not going away,” he said. “The blind spot has been there for a long time,” he added.
He pointed to data-quality scoring used in climate accounting frameworks such as PCAF, which assess how emissions data is calculated on a scale of one to five – with one being the best and five being the worst.
“In contrast to asset-intensive sectors like energy, where emissions can often be measured at the facility or asset level, insurance claims emissions are still commonly estimated using high-level proxy methods, which sit at the lowest end of commonly used data-quality scales,” he warned.
In his view, this showed that, despite being an industry dominated by actuaries and built on data production, insurers had some of the weakest visibility into their own climate‑related data.
Scope 3 referred to indirect emissions – in insurance, which included both investments and the activity of suppliers and vendors. On the property and casualty side, Huartt argued, claims activity was the single biggest driver.
“In Canada, claims related to Scope 3 emissions are driven by 20 to 30 billion dollars in annual claims expenditure each year,” he said. “For insurers, the biggest part of their Scope 3 footprint that they can directly influence is claims.”
His perspective came from the ground up. Before launching EcoClaim, Huartt built MBC Group into a national forensic and engineering consultancy, handling “five to six thousand property claims a year.” That experience, he said, made it impossible to miss the carbon intensity of everyday restoration work.
On a typical claim, every damaged building became a demolition and renovation project. Construction waste alone was a major factor.
“One of the biggest things we realised is that before EcoClaim, roughly 95% claims related to waste in Canada went straight to landfill,” he said. He noted that, because restoration work inherently involves a demolition component due to the nature of the losses, which means the share of construction waste ending up in landfill is even higher in restoration than compared with conventional construction.
Yet most insurers, he argued, were still treating Scope 3 as an abstract reporting problem rather than something tied directly to how they repaired and rebuilt.
“What they're doing now is that they are basing it on premium, but that's counterintuitive because every insurer wants to grow,” Huartt said. “The problem is, if you grow and you benchmark your Scope 3, emissions to premium, emissions are going to continue to grow and never go down – unless your business is unhealthy.”
In his view, that approach missed the point. He argued that this assumption was already being disproven in practice, noting that in many programs his firm was currently delivering the same level of claims spend while generating far lower emissions, based on work measuring and reducing claim‑related emissions for carriers in Canada and the UK.
The regulatory clock was also ticking. OSFI had pushed full Scope 3 disclosure requirements to 2028, but climate returns would begin earlier, and the supervisor had been clear that it expected data quality and external verification to improve over time.
“The problem's coming,” Huartt said. He noted that as 2028 drew nearer, the reporting timelines were shrinking and the expectations for more robust data were only intensifying.
“Whether insurers agree with it or not, this problem is hurtling towards them.”
For Huartt, this was about more than satisfying regulatory demands. He framed it not just as a reporting exercise but fundamentally as an environmental issue. He maintained that the data clearly showed the climate was changing and that human activity had played a role, with the result that society in general, and the insurance industry in particular, were now bearing the cost as climate‑related catastrophes surged.
“They have a duty of care, not only to the world, but to their shareholders, if they can do things that reduce that effect and reduce their expenditure,” he said.
