Swiss Re today announced further measures to support the transition to a low-carbon economy. The Group will stop providing re/insurance to, and investing in, the most carbon-intensive oil and gas companies. In addition, Swiss Re has taken further actions to reduce the carbon intensity of its investment portfolio. For its own operations, Swiss Re has committed to achieving the goal of net-zero emissions by 2030.
Swiss Re is a signatory to the ’Paris Pledge for Action’. In September 2019, the Group confirmed this position by signing the UN Business Ambition for 1.5°C pledge and initiating the UN-convened Net-Zero Asset Owner Alliance, thereby committing to net-zero emissions by 2050 on the asset and liability side. Today, Swiss Re announced further measures to reduce carbon emissions.
Swiss Re’s Group Chief Executive Officer Christian Mumenthaler said: “It is every company’s obligation to contribute to the transition towards a low-carbon world, and we take this responsibility very seriously. For the past 40 years Swiss Re has been warning about the effects of climate change and implementing progressive measures to reduce emissions. Today we are announcing our next steps on this journey to decarbonise our entire business model and live up to our net-zero emissions commitments.“
Revised oil and gas policy
In 2018, Swiss Re implemented a thermal coal policy as a first step towards a comprehensive carbon steering mechanism. The coal policy is part of its Sustainability Risk Framework established already in 2009. Swiss Re has now also revised the oil and gas policy in the same framework with the aim to reduce Swiss Re’s carbon exposure by stopping support for production of oil and gas that exceeds a defined lifecycle carbon intensity threshold.1 As a result of this new policy, Swiss Re will gradually cut business support in underwriting and asset management to the world’s 10% most carbon-intensive oil and gas production by 2023. Swiss Re will continue to work with and support the transition of those producers who do not fall under these exclusions.
Further measures to reduce carbon intensity of investment portfolio
As a member of the UN-convened Net-Zero Asset Owner Alliance, Swiss Re has committed to transition its investment portfolio to net-zero greenhouse gas emissions by 2050.
Swiss Re was one of the first in the industry to switch to ESG benchmarks in 2017. Swiss Re divested from companies with an exposure of more than 30% to thermal coal in 2016 and in 2019 added absolute thresholds2 for mining companies and power utility generators. Through these measures, Swiss Re has achieved a 50% average carbon intensity reduction in its investment portfolio across credits and listed equities since the end of 2015.
As a further measure, Swiss Re has increased its green, social and sustainable bond target from USD 1.5 billion to at least USD 4 billion by 2024.
Commitment to net-zero emissions from own operations by 2030
For its own operations, Swiss Re has committed to reaching net-zero emissions by 2030.
Swiss Re has already been focusing on its own CO2 emissions and energy consumption for many years and launched its Greenhouse Neutral Programme in 2003 combining the commitment to reduce its CO2 emissions per employee with offsetting all remaining emissions by purchasing high-quality emission reduction credits.
To reach the target of net-zero emissions by 2030, Swiss Re will further increase its efforts to cut emissions, with a particular focus on business travel. In addition, for every tonne of CO2 that cannot yet be avoided, another tonne will be removed from the atmosphere and stored permanently. To pay for this new way to compensate emissions, Swiss Re will ramp up its internal carbon levy. A stringent price on carbon will incentivise emission reductions, for example through less travel by air.
1 Lifecycle carbon intensity as measured by kilograms of carbon dioxide per barrel of oil equivalent. By 2023, no support will be provided for the 10% most carbon-intensive production.
2 Mining companies producing at least 20 million tonnes of coal per year and power utility generators with more than 10 GW installed coal fire capacity.