Sustainable progress — or sustainability — can be described as development that meets the needs of the present without compromising the ability of future generations to meet their needs. To be sustainable, progress must improve economic efficiency, protect and restore ecological systems and enhance social well-being.

Swiss Re’s business model helps to create stability. By managing risks and covering losses, we protect investments and enable economic growth. We seek to ensure that specific issues posing a potential threat to sustainability are adequately addressed.

Risk intelligence is as fundamental for sustainability as it is for every other aspect of our business. Our Sustainability Risk Framework addresses sustainability risks in our core business — activities in sensitive sectors such as oil and gas, defence and nuclear proliferation, mining, dams, forestry, pulp & paper and oil palm, animal testing, or with clients whose practices may have severe and repeated detrimental effects on human rights or the environment. Potentially sensitive business risks (SBRs) are referred to and handled through a tailor-made SBR process. In 2013 there were 210 SBR referrals. Certain countries (in 2013: North Korea, Somalia and Sudan) and companies (such as those involved in particularly cruel weapons that inflict indiscriminate and disproportionate harm) are excluded from consideration outright.

We keep abreast of newly emerging risks through another structured process: “Systematic Observation of Notions Associated with Risk,” or SONAR, is a Group-wide framework that allows us to identify and assess emerging risks and to incorporate the resulting insights into the relevant decision-making processes. In 2013 more than 100 “risk notions” were fed into SONAR, including driverless cars and oil drilling in remote areas. While many of the early signals will never actually turn into emerging risks, many may well do so. We also meet with other organisations to gain a better understanding of emerging risks, such as the World Economic Forum, the CRO Forum’s Emerging Risk Initiative and the International Risk Governance Council.

Since 2012, we have been reporting our progress against the Principles for Sustainable Insurance (PSI). The PSI initiative was launched in 2012 at the UN Conference on Sustainable Development, after a worldwide consultation process that culminated in a meeting at our Centre for Global Dialogue. It presents a reporting framework that aims to ensure that “all activities in the insurance value chain, including interactions with stakeholders, are done in a responsible and forward-looking way by identifying, assessing, managing and monitoring risks and opportunities associated with environmental, social and governance issues.” We are one of the original signatories of the PSI and we played an active role in its development. The PSI progress report will again be included in our 2013 Corporate Responsibility Report.

This coincides with another global framework for the financial sector, the Principles for Responsible Investing (PRI), which we signed in 2007. As a natural extension of our Sustainability Risk Framework, we integrate sustainability-related risk information consistently across our entire investment portfolio. We consider environmental, social and governance (ESG) factors as an integral part of our investment management activities and decisions – also in the belief that these factors can have an impact on the financial performance of the investment portfolio in the long run. Our Responsible Investment Policy, issued by the Group Chief Investment Officer, defines Swiss Re’s approach as a responsible investor to follow high standards in its investment process. For key aspects of our investment activities — including sovereign fixed income investments, the engagement of external managers, the exercise of voting rights and direct real estate investments — we have developed specific requirements to ensure ESG criteria are duly taken into consideration. This creates both ethical and business value: we believe that ESG factors are a core element of long-term sustainable risk-adjusted economic value creation.