Championing climate action
Swiss Re decarbonises its business model
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Swiss Re is committed to net-zero emissions by 2050 on the asset and liability side
The effects of climate change and global warming are already evident and shaking up our risk landscape: warmer average temperatures, rising sea levels, melting ice caps, longer and more frequent heatwaves, erratic rainfall patterns and more weather extremes. Tackling climate change and advancing the transition to a low-carbon economy are key topics for Swiss Re's business as a risk knowledge company.
In December 2015, Swiss Re signed the Paris Pledge for Action to affirm our support for the Paris Agreement. Its aim is to strengthen the global response to the threat of climate change. Since then we have taken various steps to meet the targets across all our business activities, including our assets, liabilities and operations.
On the asset side we've incorporated Environmental, Social and Governance (ESG) criteria across our entire investment portfolio and were among the first to move to ESG benchmarks. We've also introduced a thermal coal policy as part of our carbon steering in our sustainability risk framework and are actively pursuing new opportunities in the renewable energy sector in our underwriting, especially in wind and solar. And we're reducing our own operational carbon footprint by adopting low-carbon alternatives wherever we can.
Signing the "Business Ambition for 1.5°C" at the UN Climate Action Summit is a logical further step for us to decarbonise our business model and lead the way towards a low-carbon future. Focusing on the asset side, Swiss Re joined other large asset owners to launch the UN-convened' Net-Zero Asset Owner Alliance. The asset owners commit to carbon-neutral investment portfolios by 2050. This is a huge step in decarbonising the global economy as the founding members are responsible for directing more than USD 2.4 trillion in investments.
"As a global reinsurer, we can play a vital role in championing action on climate change far beyond our own industry", comments Christian Mumenthaler, Group CEO Swiss Re.
Guido Fürer, Group Chief Investment Officer, Swiss Re adds: "We are proud being an initiator of the "Net-Zero Asset Owner Alliance" and to committing to net-zero greenhouse gas emissions in our investments portfolio by 2050. This builds on our leadership in responsible investing and is a great step towards making the world more resilient."
The momentum to strengthen the global response to the threat of climate change is evident in New York. UN Development Programme, Germany, UK and Insurance Development Forum (IDF) announced commitments to increase insurance protection in climate-exposed countries. The new programs to accelerate implementation of risk management solutions to increase adaptation and resilience to climate risks should benefit 500 million individuals.
The IDF is a public-private partnership led by the re/insurance industry and supported by international organisations. Swiss Re, together with Allianz, Aon, Axa, Munich Re, Renaissance Re, Scor and Willis Towers Watson haven endorsed the commitment.
On the liability side of the balance sheet a sense of urgency is imperative, and we are accelerating investment in low carbon initiatives and proving to be a powerful enabler in mitigating the effects of climate change. Examples from the Swiss Re portfolio include:
- Clean energy: Insurance for offshore wind installations in France and Taiwan, a solution which can be replicated throughout the world
- Clean energy: Insurance that pays for replacement of residential solar panels damaged by hurricanes
- Sustainability/food supply: Coverage for farmers in underinsured nations such as Mexico, which guarantees replacement of lost income when extreme weather slashes crop yields
- Climate risk: Helping companies understand how their assets and supply chains could be exposed to severe weather from future climate scenarios
- Reputational risk: Assessing and mitigating impairment to a company’s brand from ESG lapses, using a parametric trigger and indemnity concept backed by a broader data set and machine-learning
We have committed to net-zero emissions by 2050 on the asset (investment) and liability (underwriting) side. As a global reinsurer, we can play a vital role in championing action on climate change far beyond our own industry.