This article is based on a presentation at IBA’s Fall 2022 Forum on Accounting and Finance Analytics: Perspectives on ESG Reporting by Jana Utter, who serves as the Vice President for Enterprise Risk Management for Centene Corporation.
Jana Utter, the Vice President of Enterprise Risk Management (ERM) at Centene, is among the practitioners who approach ESG with practical knowledge. Centene is a healthcare insurance provider for over 25 million Americans, primarily through Medicaid, the Health Insurance Marketplace, and Medicare. Seven years ago, Utter created an emerging risk report when she joined Centene, which included the potential risks that could arise due to climate change.
While property insurers are likely to be impacted by climate-induced events, health care insurers and providers can also be affected. As a company that serves vulnerable populations, Centene is concerned about the environmental impacts on health. Utter discussed events like wildfires and droughts causing water shortages, which often affect those who lack disposable income and are unable to invest in temporary housing or purchase bottled water. Unfortunately, these populations are often the most impacted by weather-related disasters.
Emerging risk reports developed by Utter and her team continued to expand as ESG-related topics continued to surface in areas like executive pay transparency, diversity, equity, inclusion, and governance-related issues, such as board refresh and shareholder rights. In 2019, Centene looked for someone to take responsibility for exploring the growing focus on ESG and determine how to address in a holistic manner and Utter was the perfect candidate.
Utter said, “We realized that we were already doing many activities that fell under one or more of the letters in the acronym ESG, so we focused on identifying the initiatives that could be tagged to E, S, or G and developed Corporate Sustainability and ESG pages on our website.”
Utter also emphasizes the tremendous value of the COSO Framework, which is a collaborative effort of several national and international accounting and financial organizations. The framework includes one for ERM and another that applies the ERM framework to ESG, providing guidelines to apply ERM concepts and processes to ESG-related risks. Utter suggests starting with the ERM framework for risk management and then expanding to leverage the COSO companion guidance for applying to ESG as the best strategy for bridging the gap between ERM and ESG.
Utter encourages students to explore careers in ERM or ESG reporting and disclosures, stating that the field is both vast and expanding. ESG has the potential to create large amounts of opportunity and value for organizations in demonstrating effective risk management inclusive of ESG-related risks. Getting involved with ERM or ESG means getting involved with a company’s operations and strategy in order to better understand the contextual relevance of the various topics that live beneath the ESG umbrella.
Overall, Utter’s insights provide a unique perspective on how ESG is relevant to health insurance providers like Centene. As climate change continues to impact the world, healthcare insurers and providers are considering the environmental impacts on health, especially for vulnerable populations. By understanding the material ESG risks, companies can develop plans to address potential risks, enhance environmental resilience, and improve transparency in their reporting. The adoption of frameworks like COSO can also help bridge the gap between ERM and ESG, creating a more holistic approach to risk management.
Utter’s encouragement for students to explore careers in ERM or ESG is timely, as the field is growing rapidly, and ESG will continue to be an important topic for companies and investors alike. As ESG reporting becomes more mainstream, companies will need experts like Utter to ensure they are adequately addressing the risks and opportunities that come with ESG.
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