The state of disclosure of environmental, social, and governance dimensions in the insurance industry of Iran

The insurance industry plays an important role in sustainable development and directly and indirectly affects the sustainable performance of other industries and society. The main purpose of this study is to investigate the extent of disclosure of sustainability components in the insurance industry.

In this study, the model extracted in the research of Mahmoudkhani, Rahmani, Homayoun, and Niakan (2021), which was obtained by analyzing the content of sustainability reports, was modified and supplemented by reviewing sustainability standards and guidelines and obtaining expert opinions. The board activity report of 26 insurance companies (7 members of the stock exchange and 19 members of the OTC market of Iran) for the year 2020 was analyzed. The Chi-square test was used to examine the differences in the disclosure of sustainability components at the company level.

According to the findings, the three main dimensions of sustainability reporting in the insurance industry are environmental, social, and governance dimensions. The results showed that there is a significant difference between the disclosure of environmental, social, and governance components in double and triple comparisons between sustainability components at the level of Iranian insurance companies. The disclosure rate of the governance dimension was 21.71 for each measure and 13.13 for the social dimension on average, while this ratio is 1.53 for the environmental dimension.

In the activity report of the board of directors, most disclosure is related to the governance dimension and no disclosure has been made regarding the climate change component. A reason for paying more attention to the governance aspect is related to the regulations of corporate governance in the insurance industry, which are implemented by insurance companies.

Contribution:

 The findings of this research enrich the research literature on sustainability reporting in the insurance industry and its results can be used by insurance companies to prepare and improve sustainability reporting.