Hannover Re is committing to achieve net zero emissions in business operations by 2030 and in its reinsurance portfolio and investments by 2050, as part of its targets to support the Paris Agreement on climate change.
The reinsurer plans to develop methods to determine the greenhouse gas emissions of reinsured customer portfolios in property and casualty business.
In obligatory reinsurance, which covers entire portfolios, the calculation of the carbon footprint is considered to be a first major step towards achieving concrete reduction targets.
As part of its exit plan for thermal coal, Hannover Re already began to open a dialogue with its clients last year in obligatory reinsurance, with the aim of completely withdrawing coverage for risks connected with the mining of and power generation from thermal coal by the year 2038.
In its facultative department, which specialises in individual risks, it has already been the case since April 2019 that Hannover Re no longer provides coverage for any planned new coal-fired power plants or thermal coal mines.
Moreover, since February 2020 the facultative department has ruled out any new business connected with thermal coal or the associated infrastructure as well as covers relating to oil sands extraction and processing, and project covers for oil and gas exploration in the Arctic are similarly excluded.
For investments, Hannover Re’s first interim target is a 30% reduction in the carbon intensity of the asset classes corporate bonds, covered bonds and equities by the year 2025 compared to the base year of 2019 and the attainment of climate neutrality in this area by 2050.
The affected asset classes accounted for roughly 39% of Hannover Re’s total investment portfolio as at the end of June 2021.
Another step will emphasis sustainable investments that counteract climate change, such as investments in impact investment funds, the goal of which is to generate positive impacts on the environment and society.
The latest commitments follow Hannover Re’s move to join the United Nations-convened NetZero Insurance Alliance, the UN-initiated Principles for Responsible Investment and Principles for Sustainable Insurance, and the UN’s Environment Programme Finance Initiative (UNEP FI).
“Hannover Re’s clear Group-wide commitment to net zero targets and our membership of the Net-Zero Insurance Alliance are the next concrete steps in the progressive expansion of our sustainability engagement,” Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, said.
“The insurance industry is undergoing a transformation towards greater sustainability and we want to shape this transition in a dialogue with our customers and peers. We are aware of our responsibility as a global reinsurer and we shall support industrywide solutions to manage the consequences of climate change.”
Hannover Re has already been operating with a net zero carbon footprint at its Hannover location since as long ago as 2016 and aims to achieve this target for all business operations worldwide by 2030.
For the international locations Hannover Re is targeting a reduction of energy consumption, substitution of fossil fuels by renewable energy sources and offsetting of unavoidable greenhouse gas emissions in order to achieve its net zero targets.
“We must all play our part in fighting climate change. For us, this means that moving forward we shall put Hannover Re on an even more sustainable footing,” Henchoz continued.
“The latest report by the Intergovernmental Panel on Climate Change (IPCC) has once again made clear the need to take urgent and consistent action. The forum provided by the COP26 climate change conference offers an important opportunity to take further concrete decisions. The risk expertise of insurers and reinsurers has a key role to play when it comes to quantifying the risks of global warming and better adapting cities and buildings to climate change.”
