CRO Forum publication on "Carbon footprinting methodology for underwriting portfolios"

On the journey towards decarbonising our business model, measuring the carbon footprint of our liabilities and assets is a key requirement.

As a signatory to the Paris Pledge for Action, we are committed to supporting the ambitions set out by the Paris Agreement to limit the average global temperature rise to less than 2°C. In September 2019, we reinforced this by committing to reach net-zero emissions by 2050 across our whole business by signing the UN Global Compact Business Ambition for 1.5°C. In connection with our active role as a founding partner of the UN-convened Net-Zero Asset Owner Alliance, we have also made a net-zero commitment specifically for our investment portfolio by 2050. For our own operations, Swiss Re has pledged to reach net-zero emissions by 2030.

On the liability side of our balance sheet we introduced a thermal coal policy in 2018, a commitment to stop supporting businesses with more than 30% exposure to thermal coal utilities. We also revised our oil and gas policy in 2020 and, beginning in 2021, are gradually withdrawing insurance support for the most carbon-intensive oil and gas production.

Assessing and steering the carbon footprint of our re/insurance business is the next step towards reaching net-zero emissions for all our businesses by 2050. To do so, we need to chart new ground and find answers to a number of methodology questions in the process.

The CRO Forum publication "Carbon footprinting methodology for underwriting portfolios" is an industry-wide effort to summarise options, challenges and opportunities that re/insurance companies face in the process of assessing the carbon footprint of their liability portfolios. The report discusses different carbon footprinting methodologies that may be applied to underwriting portfolios. The general methodology presented in the paper proposes an estimation based on company- and industry-specific carbon intensity information, allowing to identify hotspots and make comparisons across liability and investment portfolios. In a next step, Swiss Re will focus on applying the methodology to our own reinsurance and insurance portfolios.