The FCA is due to publish its final rules on sustainability ratings providers this quarter. The reason it’s stepping in should make every underwriter pause before trusting a single number.
According to the FCA’s own research, 55% of ratings users are concerned about how ratings are developed, and they point to outdated or inaccurate data and estimates. A headline score is only as reliable as the evidence underneath it, and too often nobody can see that evidence.
Same Score, Different Risk
Imagine two mid-market companies that both score 72 out of 100.
The first earns its score through detailed policies, published emissions figures and recognised certifications across every material topic. The second scores highly on governance and workforce statements, but has nothing at all on flood exposure, energy resilience or supply chain continuity.
On a dashboard, the two look identical. On a risk register, they are not.
What a Single Number Hides
The problem is averaging. Strong performance in low-materiality areas can quietly offset silence on the topics that drive claims, and a single number gives no warning that this has happened.
Headline scores tend to hide three things:
- Which topics are genuinely evidenced and which are blank
- What type of evidence sits behind each answer, from a website statement to a published report or a certification
- Where a modelled estimate has stood in for the company’s own reported evidence
For an insurer, those differences matter. A company with a strong policy framework but no evidence on physical risk is a different underwriting proposition from one with documented resilience measures, whatever the headline says.
Why Topic-Level Evidence Matters for Underwriting
Underwriting, ORSA and Solvency II all ask the same underlying question: can you explain and defend how you assessed this risk? A number you can’t unpack is hard to defend.
Topic-level evidence changes that. When you can see how a company performs on each material topic, compared with peers in the same industry and revenue band, gaps become visible before they become losses.
Evidence types and disclosure strength matter too. A recognised certification and a published policy carry different weight, and a view you can make decisions on should show which is which.
How public disclosure analysis shows the detail
TDH’s public disclosure analysis is built for exactly this. It assesses UK mid-market companies across 120 metrics, drawing on website disclosures, policy documents, sustainability reports and certifications, with each topic weighted by how material it is for that industry.
Every result breaks down to topic level and to individual metrics, benchmarked against peers in the same sector, industry and revenue group. Where a gap has been filled with a model rather than evidence, it is labelled as such, so a strong score can’t hide a weak foundation.
What This Means for Risk Teams
The data isn’t missing. Mid-market companies publish more than most underwriters realise; it’s just fragmented and not pulled together into a form you can make decisions on.
The question for risk teams isn’t “what’s the score?” It’s “what’s behind it, topic by topic, and is that evidence strong enough to price on?”
See What Sits Beneath the Headline
Talk to our team about a topic-level view of the mid-market companies in your book, and where the real evidence gaps are.
