A year of momentum and action
Countries around the world depend on a range of vital natural services –known as biodiversity and ecosystem services (BES) –to help maintain the health and stability of their communities and economies. These include services such as water provision, food security and the regulation of air quality. In fact, 55% of global GDP is moderately to highly dependent on intact ecosystems, as a study by Swiss Re Institute has shown. However, BES are in serious decline in many countries around the world.
The twin challenges of climate change and biodiversity degradation
Nature has proven its ability to self-heal over time, to capture carbon and to reduce the impact of weather-related and other disasters. In turn, man-made solutions that mimic nature or rely on its support can help societies prevent, mitigate and recover from the impacts of climate change and natural disasters. As a re/insurer, we believe that preserving nature’s effectiveness holds the key to a more resilient and prosperous future. Re/insurance can play an important role in identifying and assessing nature-related risks. Furthermore, it can help protect natural assets through thematic investments, by excluding activities that cause harm to nature, and by enabling the development of so-called “nature-based solutions”. We started to address biodiversity over a decade ago and have continuously expanded our approach since then. In 2021, we made the link between the twin challenges of climate change and biodiversity degradation more explicit through increased collaboration and focused risk transfer solutions.
Partnering for nature-positive models
In 2021, there was a marked acceleration in global policy developments to mitigate nature loss, culminating in several commitments by the G7 and the G20 to continue and increase their efforts to address these challenges. At the UN Biodiversity Conference (COP15) in China, more than 100 countries pledged to make habitat protection and biodiversity considerations central to their economic decision-making. In addition, the Task Force on Nature-related Financial Disclosures (TNFD) was launched, with the goal of developing a risk management and financial disclosure framework to support a shift in global financial flows away from nature-negative outcomes towards nature-positive outcomes. Swiss Re is active in many such forums, eg supporting the work on the Global Biodiversity Framework and collaborating with the World Economic Forum and the World Business Council for Sustainable Development on nature action initiatives. We are also a member of the TNFD (Memberships, commitments and index listings). In addition to our work with these institutions, we have also presented our assessments in many interactions with various stakeholders.
Integrating biodiversity considerations in our business
In 2021, we made further progress in integrating biodiversity considerations into our business. We have, for example, strengthened our approach to biodiversity risk in our ESG Risk Framework (see section ESG Risk Framework) and hosted a SONAR “Dialogue on Biodiversity” series to help deepen the debate on the topic ( see section 'Biodiversity'). Furthermore, Swiss Re’s BES Index has been integrated into several in-house tools including CatNet® and the Swiss Re Risk Resilience Centre. This supports our clients and partners in business and government in understanding their exposure to risks emanating from biodiversity and ecosystem services decline and enables them to factor biodiversity into their economic decisions.