Our Sustainable Business Risk Framework

In a market environment, profitable business activities create economic value. Occasionally, however, they may also have adverse effects on the environment and certain vulnerable groups. If such impacts are ignored, they may pose a threat to societies’ long-term sustainable development.

For companies this situation can create dilemmas. A particular business transaction may be economically beneficial and in compliance with all legal and regulatory requirements, yet may have significant environmental or social downsides. Swiss Re recognises that such dilemmas exist and develops effective responses through a well-defined approach and by taking decisions based on ethical principles.

Our Sustainable Business Risk Framework is an advanced risk management instrument designed to identify and address the potentially negative effects of our transactions on local communities, workforces and the environment. This framework applies to all of our business transactions in re/insurance as well as investments, to the extent that we can influence their various aspects.

The Sustainable Business Risk Framework consists of:

  • Two umbrella policies on human rights and environmental protection plus eight specific guidelines on sensitive sectors or issues
  • The Sustainable Business Risk (SBR) process comprising an online assessment tool and a referral tool – due-diligence mechanisms to assess our business transactions
  • Company exclusions
  • Country exclusions beyond mere compliance with international trade controls (ITCs)

Policies and guidelines

Our Sustainable Business Risk Framework is based on the overarching principles of respecting human rights and protecting the environment, encapsulated in two umbrella policies that are valid for all our transactions. In addition, specific guidelines apply these overarching principles to eight sectors or issues in which we perceive major sustainability risks: the defence industry; oil and gas; mining; dams; animal testing; forestry, pulp and paper and oil palm; nuclear weapons proliferation; and thermal coal.

We regularly review all the policies and guidelines of our Sustainable Business Risk Framework to ensure they stay abreast of relevant new risk developments and stakeholder expectations. In 2019, we continued with the implementation of our thermal coal policy, engaging with over 300 clients in the process, and revised our oil and gas policy. These improvements to the Sustainable Business Risk Framework form an important part of the efforts we have taken towards gradually decarbonising our business model (see Towards decarbonising our business model).

The Sustainable Business Risk process

Each of the two umbrella policies and eight sector guidelines of our Sustainable Business Risk Framework contains criteria and qualitative standards which define precisely when a transaction may present a sustainability risk. We assess such transactions through our Sustainable Business Risk (SBR) process with its two due-diligence mechanisms.


(247 in 2018)

Sustainable Business Risk trans­actions referred to our team of sustainability experts

The online tool stores the relevant sustainability risk information for these sectors and thus provides our underwriters with an efficient means to check the potential impact of their transactions on human rights, labour rights and the environment. For transactions that reveal low to medium risks, they need to carry out additional due diligence based on industry and country advice provided by the tool.

If the potential human rights or environmental risks of a transaction are assessed as high but the responsible underwriter wants to pursue it, it is automatically transferred through the SBR referral tool to Swiss Re’s in-house team of sustainability experts. These specialists then conduct in-depth research to decide whether the transaction at hand is acceptable on ethical grounds.

This decision takes the form of a binding recommendation either to go ahead with the transaction, to go ahead with certain conditions attached or to abstain. If there is disagreement about the recommendation, the case can be escalated to the next management level and, ultimately, to the Group Chief Risk Officer and the Group Executive Committee.

Since we introduced the SBR assessment tool in 2015, we have continually fine-tuned it, thus strengthening our underwriters’ ability to integrate sustainability risk assessments into their decision-making. Between 2015 and 2017, this led to a marked, and steady, decrease of SBR referrals to our in-house sustainability experts.

Sustainable Business Risks referred to our expert team in 2019, by sector/issue
Sustainable business risks referred to our expert team in 2019, by sector/issue (pie chart)
Number of Sustainable Business Risk referrals and decisions taken
Number of sustainable business risk referrals and decisions taken (bar chart)

In 2018, however, the number of referrals rose from 178 to 247 (see chart above). This increase was mainly driven by the introduction of our thermal coal policy. Many of the coal-related referrals were submitted by our underwriters to have the thermal coal exposures of specific transactions clarified. In 2019, the number of referrals fell again, to 238 transactions. Of those we issued negative recommendations in 37 cases and positive recommendations with conditions in 42 cases.

Company exclusions

The policies of our Sustainable Business Risk Framework specify certain criteria that may lead us to exclude a company from both our re/insurance transactions and our investments, to the extent that such an exclusion is permissible (eg by virtue of mandatory law or internal policies) and possible (eg if existing documentation relating to such re/insurance transactions and investments provide for it). These criteria include: involvement in prohibited war material; verifiable complicity in systemic, repeated and severe human rights violations; causing repeated, severe and unmitigated damage to the environment; unregulated proliferation of nuclear weapons; and unethical/cruel animal testing practices.

Country exclusions

Swiss Re also excludes certain countries from its business that have particularly poor human rights records. This step goes further than compliance with ITCs. Our goal is to refrain from directly underwriting risks or making investments in entities that are based in these countries. We review the list of excluded countries annually based on independent human rights assessments and update it if warranted.

As the Sustainable Business Risk Framework is based on the principles of respecting human rights and protecting the environment, the SBR process with its two due-diligence tools, company exclusions and country exclusions is our principal means to ensure compliance with the UN Global Compact in our core business.


Ever since we introduced our comprehensive Sustainable Business Risk Framework eleven years ago, we have made considerable efforts to raise awareness of sustainability issues among our underwriters and client managers. Through training, we ensure that they know how to properly apply the framework with its underlying principles of respecting human rights and protecting the environment. In recent years, we have focused on high growth markets where we want to expand our business.

A couple of years ago, we developed a new eLearning course for our in-house training. While this continues to be compulsory for all our employees who work in underwriting and with our clients, it is now mandatory for all our new entrants, as well. In 2019, a total of 3 000 employees completed the mandatory training course.

Client and industry interaction

Over the year, we had a number of important external engagements on sustainability risks with clients, brokers, investors, industry peers and civil society groups such as environmental and humanitarian NGOs. We held in-person meetings with clients operating in sensitive sectors such as mining, forestry, and oil and gas, discussing potential measures they could take to address their sustainability risks.

As part of our ongoing efforts to implement our thermal coal policy (see Towards decarbonising our business model), we had over 300 engagements with clients across the globe in 2019. Many of them introduced a thermal coal policy themselves and in turn are helping us reduce our carbon exposure in our treaty business.

At Swiss Re’s headquarters, our Energy line of business team held an in-person meeting with its broker community on the industry’s journey towards net-zero emissions. The discussion centred on the question of how the oil and gas industry can embrace the low-carbon transition and how the insurance sector can offer support for this.

In partnership with other re/insurers, we are also developing risk assessment tools designed to help the industry better understand and manage sustainability risks. One of these ongoing partnerships is the UNEP FI Principles for Sustainable Insurance.

In 2019, the PSI launched the first guide for the re/insurance industry to preserve protected areas such as World Heritage Sites. We actively contributed to the development of this guide, which is a significant step forward in making the protection of World Heritage Sites a market standard. It confirms our long-standing commitment to preserve protected areas, enshrined in several policies of our Sustainable Business Risk Framework.