Committing to reach net-zero emissions in our operations by 2030
In 2019, we made a major new commitment: to reach net-zero emissions in our own operations by 2030. This is an ambitious goal. It requires us to double down on our efforts to cut emissions and to shift from conventional carbon offsetting to carbon removal. Below and in Compensating our CO2 emissions: moving from carbon offsets to carbon removal you can find out more about our net-zero commitment and our early engagement in the nascent carbon removal market.
Over the years, we have set ourselves ambitious targets to address our own CO2 footprint. In 2003, we were one of the first large companies worldwide to commit to becoming greenhouse neutral. In 2014, we pledged to cover all our energy consumption from renewable sources by 2020 and, to motivate other companies to do the same, co-founded the RE100 initiative. To see where we stand on this journey at the end of 2019, see Our Greenhouse Neutral Programme.
With these internal measures we have played a pioneering role in the fight against climate change. Today, however, climate scientists clearly state that efforts need to be reinforced: to keep global warming well below 2°C, the world needs to reach net-zero emissions by 2050 (see illustration above). Put simply, net-zero emissions means that for every tonne of CO2 that cannot be reduced yet, another tonne needs to be removed from the atmosphere and stored permanently through so-called carbon removal technologies. Scientists further predict that it will take billions of tonnes of negative emissions to keep warming below 2°C – the longer emission reduction efforts are deferred, the more.
Swiss Re has decided to play a leading role again in this accelerated effort to mitigate climate risk. Thus, in 2019 we committed to reaching net-zero emissions in our operations by 2030. This underscores our pledge to reach net-zero emissions by 2050 both in our re/insurance business (see Towards decarbonising our business model) and in our investment portfolio (see How we engage).
To achieve net-zero in our operations, we need to do two things: Firstly, we will double down on our efforts to reduce emissions. As approximately 70% of our CO2 footprint stems from business travel, we will focus on flight emissions, starting with a reduction target of at least –15% in 2020. Afterwards, further reductions will be incentivised by ramping up our existing internal carbon price to a stringent carbon steering levy.
Secondly, we will start to buy impactful carbon removal certificates, which are significantly more expensive than conventional carbon offsets. The latter cannot be used to substantiate a net-zero emissions claim, though (see Compensating our CO2 emissions: moving from carbon offsets to carbon removal). The new carbon steering levy will address both objectives at the same time – cutting emissions from flights that are not absolutely needed and raising funds to support carbon removal projects.
Carbon removal is still a nascent industry. Our early engagement will help it grow and deliver at scale by 2050. It will, however, not be feasible to buy high-quality removal certificates for all our emissions immediately. Any surplus funds generated through the carbon steering levy will be channelled back to our business for sustainability-focused initiatives.