Swiss Re ramps up actions to fight climate change
Reinsurer pledges to cut underwriting and asset management support to the world's 10% most carbon-intensive oil and gas companies
Zurich-based Swiss Re is intensifying its efforts to address the growing climate change crisis by committing to a number of measures to curtail carbon emissions.
To this end, the reinsurer will implement new guidelines on its dealings with the oil and gas industry and will withdraw its support for the most carbon-intensive companies. It has also pledged to deliver net-zero emissions from its own operations by 2030.
In 2018, Swiss Re implemented a thermal coal policy as a first step towards a comprehensive carbon steering mechanism. With the new guidelines, the firm will stop supporting companies whose oil and gas production exceed a defined lifestyle carbon intensity threshold.
In applying these guidelines, Swiss Re will gradually cut its underwriting and asset management support to the world’s 10% most carbon-intensive oil and gas production companies by 2023. However, the firm will continue to work with and support those producers transiting to carbon neutrality that do not fall under these exclusions.
Swiss Re has also committed to reducing the carbon intensity of its investment portfolio. In 2016, it divested from companies with more than 30% exposure to thermal coal and, in 2019, it added absolute thresholds for mining companies and power utility generators.
Since the end of 2015, these measures have achieved a 50% average carbon intensity reduction in Swiss Re's investment portfolio across credits and listed equities. As a further measure, the company has committed to increasing its green, social and sustainable bond target from US$1.5 billion to at least US$4 billion by 2024.
To reach Swiss Re’s target of net-zero emissions from its own operations by 2030, the reinsurer will further increase its efforts to cut emissions, with a particular focus on reducing business travel. And, for every tonne of carbon dioxide that still cannot be avoided, another tonne will be removed from the atmosphere and stored permanently. To pay for this new way of compensating for emissions, Swiss Re will ramp up its internal carbon levy, reasoning that a stringent price on carbon will further incentivize emission reductions.
“It is every company’s obligation to contribute to the transition towards a low-carbon world, and we take this responsibility very seriously,” says Christian Mumenthaler, Swiss Re’s group chief executive officer. “For the past 40 years. Swiss Re has been warning about the effects of climate change and implementing progressive measures to reduce emissions.
“We are announcing our next steps on this journey to decarbonize our entire business model and live up to our net-zero emissions commitments.”
Swiss Re has been in Asia since 1913, and the region is a key pillar of its business. The firm is also a signatory to the Paris Pledge for Action.
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