Zurich signs up to UN business pledge to limit global temperature rise
Company is first insurer to sign up to UN Global Compact Business Ambition Pledge, aims to use only renewable energy by 2022
Zurich Insurance Group (Zurich) is accelerating actions to progress towards a low-carbon economy amid an increasing climate crisis.
Zurich becomes the first insurance company to commit to targets set in the framework of the UN Global Compact Business Ambition Pledge that aims to limit the global temperature rise to 1.5°C above pre-industrial levels. The insurer will also expand its existing thermal coal policy aimed at reducing the use of carbon-intense fossil fuels.
The recent report by the UN Intergovernmental Panel on Climate Change (IPCC) gives the world only 11 years to successfully transition to a new path or risk planetary warming with unimaginable consequences. This will require an immediate and major transformation across energy, land, industrial, urban and other systems.
“As one of the world’s leading insurers we see first-hand the devastation natural disasters inflict on people and communities. This is why we are accelerating action to reduce climate risks by driving changes in how companies and people behave and support those most impacted,” says Mario Greco, CEO Zurich Insurance Group.
Zurich recognizes the vital role the Science Based Targets (SBTs) play in meeting the Paris Agreement’s targets by specifying how much and how quickly companies need to reduce emissions. Currently, in the insurance sector, SBTs do not typically exist for either underwriting or investment portfolios. However, as part of Zurich’s pledge, it is playing an active role in developing industry methodology for measuring the carbon footprint of liabilities to enable setting such targets. Zurich has also joined the Stakeholder Advisory Group of the Science Based Target initiative, a project to help financial institutions align their lending and investment portfolios with the Paris Agreement ambition.
As part of Zurich’s Pledge, it is also updating its position on some of the most carbon-intense fossil fuels. In line with Zurich’s prior thermal coal policy, Zurich will engage with both clients and investee companies with more than 30% exposure to thermal coal, oil sands and oil shales in a dialogue over a two-year period with the aim of driving a deeper conversation regarding their credible mid to long-term transition plans.
The updated position outlines that Zurich generally will no longer underwrite or invest in companies that:
- generate more than 30% of their revenue from mining thermal coal, or produce more than 20 million tons of thermal coal per year;
- generate more than 30% of their electricity from coal;
- are in the process of developing any new coal mining or coal power infrastructure;
- generate at least 30% of their revenue directly from the extraction of oil from oil sands;
- are purpose-built (or dedicated) transportation infrastructure operators for oil sands products, including pipelines and railway transportation;
- generate more than 30% of their revenue from mining oil shale, or
- generate more than 30% of their electricity from oil shale.
The company also announces that it will use only renewable energy for power by 2022, and has formally joined the RE100, a global leadership initiative bringing together influential businesses committed to 100% renewable electricity. In addition, Zurich is taking action to eliminate single-use plastics and reduce internal paper usage by 80%. With extreme weather events already causing devastation around the world, Zurich will also continue to help those communities most impacted by flooding through a program to enhance flood resilience, which has already benefitted 225,000 people across nine countries.
Zurich began instituting environmental, social and governance (ESG) considerations into its core business practices in 2012. The company became carbon neutral in 2014.
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