2030 Sustainability Ambitions
Mitigating climate risk and advancing the energy transition
The effects of climate change are already evident and impacting our risk landscape: warmer average temperatures, rising sea levels, longer and more frequent heatwaves, as well as more intense precipitation events. These phenomena are becoming the new normal and will increasingly impact our way of life, our health and our natural environment. Urgent questions we need to ask are how to tackle climate change, how to advance the transition to renewable energy, and how we can best adapt to and mitigate climate risk.
Swiss Re’s main responses to this challenge are to make societies more resilient to the growing risks of climate change and natural hazards, as well as evolving our way of doing business towards net-zero carbon emissions by 2050, in line with the Paris Agreement. We do this in a number of ways.
With our underwriting and innovative re/insurance solutions, we can help communities and businesses get back on their feet quickly after a disaster, as well as prepare them for more frequent and severe climate impacts.
We build partnerships with clients and governments to develop scalable solutions to mitigate and adapt to climate change. This includes offering solutions that support the transition to more sustainable, low-carbon energy systems by managing the risks associated with renewable energy projects and making them more attractive to investors with re/insurance backing. Overall, it is our goal to be a leading re/insurance capacity provider for the development of renewable energy solutions.
Furthermore, we promote sustainable practices in our own operations to demonstrate good stewardship, lead by example and drive long-term performance. We have adopted a holistic strategy to responsible investing, including investment practices for our assets to consider environmental, social and governance (ESG) criteria in our investment decisions. Limiting global warming is part of this effort, and we are reinforcing it by further reducing our own carbon footprint across our operations, investments and re/insurance offerings.
We are implementing our Group Sustainability Strategy through a structured process and are currently working on bringing it to life by defining targets, metrics and actions for our three 2030 Sustainability Ambitions. Adopting a sequential approach, we have first started to develop a Climate Action Plan, which also serves as our climate strategy (see below).
Our Climate Action Plan
Swiss Re first detected the potential long-term challenges posed by climate change some 30 years ago. Consequently, it has become our most important sustainability issue: For a re/insurer, climate change constitutes a key topic because it leads to an increase in the severity and a change in the patterns of natural catastrophes such as windstorms, floods, excessive rainfall, heatwaves and drought. In combination with growing asset concentrations in exposed areas and more widespread insurance protection, this will cause a steady rise in losses.
Climate change continues to be an essential element in our enhanced Group Sustainability Strategy: “Mitigating climate risk and advancing the energy transition” is one of our three overarching 2030 Sustainability Ambitions. In the process launched to define metrics and setting targets, we have put the initial focus on this topic and started to develop a Climate Action Plan.
Building on our commitments and initiatives of recent years, our Climate Action Plan, which also serves as our climate change strategy, combines three objectives:
- We aim to become the leading re/insurance company on physical climate risk.
- We aim to become a leading provider of re/insurance solutions for low-carbon transition opportunities.
- We build partnerships to develop scalable solutions to mitigate and adapt to climate change.
For specific targets related to these objectives, take a look at the “Mitigating climate risk and advancing the energy transition” section in Our Sustainability Topics. We will report against these targets in our 2020 Sustainability Report.
Key achievements of 2019
Below you can see a selection of key actions we took in 2019 that are relevant for our Climate Action Plan, with references to further content in the report:
- We committed to net-zero emissions on the liability and asset side of our balance sheet by 2050 (see Towards decarbonising our business model and How we engage).
- We committed to net-zero emissions in our own operations already by 2030 (see Focus: Our commitment in detail).
- We continued to implement our thermal coal policy in the treaty business. In 2019, we had over 300 engagements with clients across the globe on the topic of thermal coal (see Our Sustainable Business Risk Framework).
- Many of our clients have introduced a thermal coal policy of their own and are helping us reduce our carbon exposure in our treaty business (see Our Sustainable Business Risk Framework).
- We took a further important step in the development of our carbon steering mechanism and developed a policy to shift away from the most carbon-intensive oil and gas production (see Towards decarbonising our business model).
Building societal resilience
Technological and economic development, population growth, ageing populations and other societal trends are increasingly putting people and assets at risk. Swiss Re’s responsible investment strategy, as well as its work in the areas of health and longevity, agriculture and infrastructure represent some of the ways we help build societal resilience and reduce related vulnerabilities.
Today, billions of people are either uninsured or underinsured for life and health risks. Health gaps are widening, such as those caused by our ageing populations or chronic illnesses like diabetes. At the same time, as the world population increases, so too must global food production. But climate change and rising food prices pose a serious threat, not least to farmers and the agricultural industry. We share our knowledge, apply new technologies and partner with clients and other stakeholders to come up with innovative solutions to address these challenges. To this end, our goal is to ensure health and wellbeing across all age groups, as well as affordable and sustainable agriculture to enhance the livelihood of society.
Furthermore, economic growth depends on investment in infrastructure. However, the funding gap for both maintaining existing infrastructure and building new infrastructure is widening. As a re/insurer and long-term investor, we both underwrite the projects needed – from transport infrastructure to urban spaces or renewable energy infrastructure – and provide capital to infrastructure projects to help narrow the financing gap.
Driving affordable insurance with digital solutions
By embracing the opportunities offered by new technologies and the digital transformation, we aim to develop solutions that make insurance more affordable, accessible and available to customers. Technology not only allows us to deliver greater efficiencies through the entire insurance value chain, but also to provide innovative insurance covers and share our risk knowledge more widely.
Our goal is to use technology to provide affordable insurance for more types of risks and across broader income levels. Technology can help streamline processes, which eventually leads to more customerfriendly access to insurance and more affordable coverage. Another benefit comes from utilising our parametric solutions to speed up claims payments to customers, eg via their smart devices. Ultimately, we want to help close the protection gap by offering risk cover to a greater number of individuals through a simplified insurance value chain.
By combining smart analytics and devices we can enhance our risk knowledge as well as advice to customers to improve risk prevention, mitigation and crisis management. For example, we can improve our natural catastrophe modelling and understanding of risk exposures by combining our proprietary, internal data sources with external ones. Furthermore, customers can benefit from education and behaviour change platforms that provide advice on nutrition, exercise, sleep and other activities.
While creating new possibilities to deliver value directly to our customers and closing protection gaps, leveraging technology and using big data also raises some questions. Various regulators around the world have started to evaluate the need for regulations on the topic of big data and digital responsibility or have issued first guidelines. At Swiss Re, we seek to understand and proactively address the digital challenges surrounding the digital transformation, including developing digital best practices and integrating digital responsibility aspects into our solutions and businesses to manage the risks of digital societies.