How we engage
Voting and engagement
We believe that ESG considerations, especially good corporate governance and transparency towards shareholders, are key drivers for sustainable value creation. We recognise our shareholder rights and responsibilities as an integral part of our commitment to responsible investing. To reflect this pledge in our voting and engagement behaviour, we have defined principles in our Asset Management Voting and Engagement Policy and will report on them going forward. We review our constitutive voting and engagement principles periodically to keep them aligned with best practice.
In the case of internally managed equities, we make use of our influence as a responsible shareholder by directly exercising our voting rights and engaging with companies in which we are invested. For externally managed portfolios, we work with the relevant portfolio managers to execute our proxy votes and related engagement activities.
We review the voting policies of external managers during the due diligence process to confirm compliance with our policy. In addition, external managers are required to report on voting and engagement activities conducted on Swiss Re’s behalf.
In 2019, we exercised 95% of our voting rights of our listed equity mandates. We voted on 6 536 voting items through our external managers. We voted in line with the respective management resolution recommendation in 5 716 cases (88%) and against it in 683 cases (10%). In 131 cases (2%), we abstained from voting. The remaining votes were withheld.
In addition to shares in listed companies, investments in our equity portfolio include equity exchange-traded funds (ETFs). The fund managers cast votes on these ETFs in line with their own voting policies and processes.
Promoting responsible investing
Shifting the large institutional asset base towards sustainable investments would mark a big step forward in making the world more resilient. Swiss Re’s brand promise “We’re smarter together” is also applicable to responsible investing.
We interact with policymakers and other market participants to promote ESG considerations in the investment process. As an example, we contribute to the European Commission’s Technical Expert Group on Sustainable Finance and specifically participate in the development of climate-transition and Paris-aligned benchmarks and of ESG reporting needs for benchmarks. As an active member of the OECD’s long-term investor network, we also engage in the development of policy proposals regarding sustainable infrastructure and ESG. Furthermore, as part of relevant industry organisations we shape and advise on sustainable financial market developments in Switzerland.
Knowledge sharing is another key aspect of promoting responsible investing. We offer all Asset Management employees various internal ESG training opportunities to ensure consistent know-how across the Group. Furthermore, we are in an ongoing dialogue with other industry participants to develop responsible investing as a standard investing approach.
In this context, we hosted the “Sustainability Leadership Series– Responsible investing in practice” conference in September 2019. The event featured expert speakers as well as panel sessions and served as a platform to share first-hand insights on the implementation of responsible investing strategies, discuss policy developments and look at the latest trends in stewardship across a fast-evolving market. You can find more information about the event in Sustainability Leadership Series – Responsible investing in practice.
In 2019, we also launched the brochure Responsible Investing – Our approach, which provides an update on the implementation of our Responsible Investing strategy and outlines our most recent commitments.
We first formalised our commitment to responsible investing in 2007 by signing the Principles for Responsible Investment. In 2012, we signed the Principles for Sustainable Insurance, a further step to formally endorse our commitment to corporate responsibility. Both the PRI and PSI are taken into account within our comprehensive responsible investing framework. All PRI signatories are required to provide in-depth reporting on their responsible investment activities. Our Transparency Report is available on the PRI website.
We have once again been recognised by the PRI for our thought leadership in the field of responsible investing, achieving our best-ever rating and being nominated to the 2019 Leaders’ Group.
Being a member of the ICMA Green and Social Bond Principles since 2017 supports our view that the industry needs a more standardised responsible investing market environment with agreed definitions, standards, methodologies and best practices to move the long-term investor base further towards systematic ESG integration.
As we are determined to stay a leader in responsible investing and to continuously play a decisive role in making the world more resilient, we went one step further in 2019. To accelerate the transition to a low-carbon economy and to mitigate climate change, we co-founded the UN-convened Net-Zero Asset Owner Alliance. In this role, we committed to aligning our investment portfolio with the 1.5°C goal stated in the Paris Agreement by having a net-zero GHG emission investment portfolio by 2050.
We joined the global Science Based Targets initiative and will develop science-based emission reduction targets (sciencebasedtargets.org). Our commitment also includes advocating for and engaging on corporate and industry action as well as public policies for a low-carbon transition of economic sectors.
The UN-convened Net-Zero Asset Owner Alliance is an international group of institutional investors delivering on the commitment to transition their investment portfolios to net-zero GHG emissions by 2050. As of year-end 2019, the then 16 members represented nearly USD 4 trillion in assets under management. The Alliance shows united investor action to align portfolios with a 1.5°C scenario, addressing Article 2.1c of the Paris Agreement.