Swiss Re’s sustainability mission, principles and ambition

Our sustainability mission

The mission ties the Group’s sustainability thinking directly to its business practices. As both a direct insurer and a reinsurer, Swiss Re wants to ensure it understands the risks it is writing, and also how those risks contribute to the overall vision of making the world more resilient.

For over a decade, the company has been continuously defining environmental and social standards for conducting business. Having screened our portfolios for business that has unintended negative social and environmental consequences, we have developed an exclusion and engagement framework to manage such sustainability risks.

In 2021, Swiss Re further strengthened its approach to managing nature and biodiversity-related risks by introducing an agriculture, forestry and food policy. Furthermore, we have formally introduced a third umbrella policy on governance, fully reflecting all three risk dimensions of environmental, social and governance (ESG) factors.

The aim is not only to steer away from less sustainable business, but to steer towards more sustainable business where opportunities lie. Swiss Re has, for example, written re/insurance cover for more than 8 870 wind and solar farms in 2021.

With over USD 121.2 billion of assets under management, the company can contribute to shifting the global institutional asset base towards more sustainable investments. The Asset Management team integrates ESG considerations along the entire investment process. In addition, Swiss Re focuses on the role it can play as an asset owner by engaging with the real economy on the integration of sustainability and, in particular, climate change considerations.

Swiss Re wants to lead in sustainable operations. Bringing CO₂ emissions to net zero by 2030 is a key target. That’s why the company introduced a triple-digit real internal carbon price for its own operations – the first multinational company to do so. Currently at USD 100 per tonne of CO₂, our Carbon Steering Levy incentivises low-carbon decision-making across the Group, allowing the move from carbon offsetting to carbon removal to compensate for the remaining footprint. The levy will be gradually raised to USD 200 per tonne of CO₂ by 2030.

Swiss Re’s sustainability mission helps steer its risk research, especially in areas where the company engages with broader society. For example, we have helped decision-makers to understand the economic impact of climate change, biodiversity loss and ecosystems degradation.

Our sustainability principles

Swiss Re has three sustainability principles:

1.  We embed sustainability in all of our business activities.

   This has tangible consequences for key activities. For example, Swiss Re applies exclusions to underwriting and investments and has an integrated referral process for sustainability risks.

2.  We are a leader in developing sustainability-linked solutions and embracing opportunities in this area.

   This means that we help our clients address their sustainability challenges. For example, Swiss Re’s parametric solutions have a strong track record in the emerging markets where they are particularly helpful for the agricultural sector.

3.  We quantify sustainability performance and impact.

   Swiss Re discloses, for example, its operational carbon footprint and investment carbon intensity and has co-developed a methodology to measure the carbon footprint of the underwriting portfolio. Swiss Re has also established a clear connection between sustainability targets and compensation for all employees, based on sustainability key performance indicators.

   Detailed reporting on sustainability at Swiss Re is available in the 2021 Sustainability Report and in the Financial Report's section on climate-related disclosures (TCFD).

Our 2030 sustainability ambitions

Mitigating climate risk and advancing the energy transition

While insurance can play a role in rebuilding societies after a climate event, the best protection is to mitigate and minimise losses in the first place.

The transition to a net-zero economy is an important mitigation step to combat climate change. Only by reducing CO₂ emissions massively and across entire value chains can we prevent the worst scenarios from emerging. Swiss Re is committed to reaching net-zero emissions from underwriting and investing by 2050.

Swiss Re continuously reviews measures to assist the transition to a low-carbon economy. Examples include a new exit strategy for thermal coal and a shift away from the most carbon-intensive oil and gas production.

Swiss Re also supports the development of clean energy projects. For example, in 2021 we helped a renewable energy provider in India consolidate insurance cover for its entire portfolio of solar (80%) and wind (20%) energy plants across India, supporting its ambition to generate 25 GW of renewable energy by 2025. The energy generated is expected to benefit approximately 35 million households.

Alongside massive cuts in emissions over the next decades, the rapid deployment of carbon removal capacities will be needed to reach net-zero emissions by 2050 and to stay net-negative thereafter.

In 2021, Swiss Re entered into a partnership with carbon removal leader Climeworks, with whom it signed the world’s first long-term purchase agreement for direct air capture and storage, worth USD 10 million over ten years. The partnership demonstrates Swiss Re’s support for the carbon removal industry and sends an important demand signal to developers, investors and other buyers.

Also in 2021, Swiss Re launched its NetZeroYou2 Programme, which enables its employees and their families to measure their own carbon footprint and advises them on how to cut their emissions and offset them using Swiss Re's own carbon certificate purchasing campaign.

Climate change has become a strategic issue for many clients. Swiss Re is delivering the solutions and knowledge to address this. For example, our Climate Risk Solutions enable corporations to quantify the impact of climate risk on their portfolios.

Building societal resilience

Swiss Re’s work in the areas of health and longevity, food security and infrastructure represent some of the ways that it helps to build societal resilience.

The COVID-19 pandemic disproportionately affected health workers globally. For example, in Kenya, the company is working with a consortium of top health insurers to provide medical reimbursement cover to frontline workers, which is not just restricted to COVID-19 protection.

The pandemic has also severely impacted people’s mental health as well as their physical health. Through its partnership in 2021 with Wysa, a leading mental health platform, Swiss Re is supporting prevention, designing flexible customer-centric offerings and sharing insights.

Driving affordable insurance with digital solutions

Digital solutions help increase the accessibility, availability and affordability of insurance. Through facilitating access to insurance, the company aims to grow the resilience of low-income groups and societies and thereby help to close the protection gap. Big data and cloud computing enable the creation of new insurance models thanks to real-time connectivity and access to vast amounts of data.

As an example, the Group is creating an online platform for corporates. The platform, dubbed Sustainability Compass, will simplify the assessment, monitoring and reporting of climate-related risks. It will help clients navigate regulatory and investor reporting requirements related to climate risk and improve climate-related decision-making on a global as well as on a project or property level.

Swiss Re also seeks to understand and proactively address ethical challenges surrounding the digital transformation, including developing digital best practices and digital responsibility principles for its solutions and businesses.

For instance, Swiss Re is a partner in the “Digital Trust Label“ (DTL) pilot of the Swiss Digital Initiative, a process to safeguard ethical standards in the digital world through concrete projects. Swiss Re's automated underwriting engine designed for life insurance, Magnum Go, was recently certified with the DTL.

Swiss Re also seeks to understand how to ethically use behavioural economics in insurance. Swiss Re Institute published a research report in 2021, “To BE or not to BE. The ethical application of behavioural economics in insurance”, which provides tools and tips on this issue to assist and inspire insurance industry professionals.