Swiss Re to Reduce Equity and Bond Portfolio Emissions by 35% by 2025

Insurer raises net zero ambition and confirms thermal coal phase out.

Swiss Re has announced a carbon emissions reduction target for its corporate bond and listed equity investment portfolio of 35% by 2025. Its direct real estate portfolio is already ahead of a 1.5°C pathway by 2025, it said.

The insurer also confirmed it will exit thermal coal by 2040 in re/insurance, as it moves to accelerate its net zero transition measures.

Swiss Re Group Chief Executive Officer Christian Mumenthaler commented: “Climate change remains the biggest challenge we face as a society. We are moving ahead in all areas of our business to accelerate the transition towards net zero.”

The firm, a founding member of the UN-convened Net-Zero Asset Owner Alliance (NZAOA), expanded its targets for how to achieve the net zero transition by 2050 in line with the initiative’s target setting protocol.

In October last year, NZAOA members announced a 16-29% reduction range in emissions.

Swiss Re said its long-term objective is to exit coal-based assets for the portfolio by 2030. It also set a target to increase investments in renewable and social infrastructure by US$750 million.

The firm will also engage with companies in the equity portfolio.

Swiss Re Group Chief Investment Officer Guido Fürer said: “We believe that by engaging with the real economy and supporting the companies we invest in to develop a climate strategy and to manage related risks, we will improve our risk-adjusted returns while also propelling the transition to a net-zero emissions economy.”

Beginning of March, Swiss Re announced that it will tighten its coal policy by introducing new thermal coal exposure thresholds for treaty re/insurance in 2023. The thresholds will be lowered gradually and will lead to a complete phase out of thermal coal exposure in OECD countries by 2030 and in the rest of the world by 2040.

The announcement comes as the Institutional Investors Group on Climate Change (IIGCC) recently launched its Net Zero Investment Framework.

The NZAOA, with US$5.5 trillion of assets under management, counts 34 members, with Dai-ichi Life Insurance having joined latest.

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