Re/insurance giants Swiss Re, Allianz and Zurich are among a group 12 global companies that have committed to transitioning their investment portfolios to net zero greenhouse gas emissions.
The Net-Zero Asset Owner Alliance represents more than US $2.4 trillion, and was convened by the UN Environment Programme’s Finance Initiative and the Principles for Responsible Investment, with support by the WWF.
The aim of the Alliance is to promote responsible investment practices that can help to fight climate change by limiting the rise in global temperature to no more than 1.5°C warming.
“Mitigating climate change is the challenge of our lifetime,” said Allianz CEO Oliver Bäte. “Politics, business and societies across the globe need to act as one to rapidly reduce climate emissions.”
“We, as asset owners, will live up to our responsibility and, in dialogue with the companies in which we invest, steer towards low-carbon business practices,” he added. “We’ve already started and, by 2050, our portfolios will be climate neutral.”
Members of the Alliance will seek to reach their net-zero commitment by advocating for corporate and industry action, as well as public policies, that support a low-carbon transition of economic sectors.
The commitment is also made with the expectation that governments will follow through on their own commitments to ensure the objectives of the Paris Agreement are met.
Intermediary targets will be set at the portfolio level for 2025, 2030 and 2040 to ensure that portfolios are able to decarbonise in a timely and gradual manner.
In particular, the commitments will emphasise the impact on the real economy and emissions, implementation via an environment, social and governance approach, and joint engagement based on credible scientific input.
“As a global reinsurer, we can play a vital role in championing action on climate change far beyond our own industry,” said Christian Mumenthaler, Group CEO at Swiss Re.
Guido Fürer, Group Chief Investment Officer, Swiss Re also commented: “We are proud being an initiator of the “Net-Zero Asset Owner Alliance” and to committing to net-zero greenhouse gas emissions in our investments portfolio by 2050. This builds on our leadership in responsible investing and is a great step towards making the world more resilient.”
Speaking on behalf of Zurich Insurance Group, CEO Mario Greco said: “Business has a critical role to play in transforming the global economy to tackle climate change. At Zurich, we are determined to play our part. The recent Dow Jones Sustainability Index shows Zurich is already ahead of 99% of its peers, but we want to go further.
“In June we were the first insurance company to sign the Business Ambition for 1.5°C Pledge and we continue to seek partners focused on driving meaningful impact,” he continued. “It makes sense economically, strategically and above all, it’s just the right thing to do.”
Inger Andersen, Executive Director of the UN Environment Programme (UNEP), further stated: “There are no short-cuts to decisive climate action. We need to take a long-term view. I applaud the leadership of the investors in this Alliance. Their commitment sends a strong signal that financial markets and investors are listening to science, and moving us to a path of resilience and sustainability.”
The Net-Zero Asset Owner Alliance was initiated by Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re at the beginning of 2019. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members.