Environmental, social and governance, or ESG, risks for the U.S. property/casualty insurance and reinsurance sector have a “very low” direct impact on ratings, according to Fitch Ratings Inc.

Only a few companies reach an ESG risk level that indicates an influence on the rating, with environmental factors as the only notable driver, the Chicago-based ratings agency said in a statement Friday.

In a group of 24 Fitch-rated issuers, 96% of ESG scoring distributions have no impact, with 4% of ESG relevance scores pertaining to environment having some impact, the statement said.

The differentiation is tied to differences in companies’ risk exposures, the statement said.

“For US non-life companies, Environmental issues can be particularly relevant given a significant number of individual carriers’ underwriting exposure to natural catastrophe risk and latent asbestos and environmental (A&E) losses,” the statement said, adding catastrophes are captured in the exposure to environmental impacts subscore.

Greenhouse gas emissions and air quality is another example of an ESG risk element, according to another Fitch report, Introducing ESG Relevance Scores for Financial Institutions.

“ESG risks influence but rarely drive (financial institution) credit ratings,” added the report which covers the insurance, banking and financial services sectors.

“For most insurers with exposure to catastrophe losses, the Environmental impact is considered to be minimally relevant to the rating with a low impact,” the Fitch statement said.

Governance is also evaluated, the report said.

“Corporate governance, management strategy and financial transparency are important considerations in our credit rating process,” the report said, adding “Governance issues had a greater level of influence on credit ratings for banks and (non-bank financial institutions) in emerging markets (EM) than within developed markets (DM).”

Asia-Pacific insurers’ credit ratings were more impacted by ESG factors than North American or Europe, Middle East and Africa issuers, the report said, but credit ratings for this sector were less impacted by ESG factors than for NBFIs or banks, the Fitch report said.