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Swiss Re plans full coal exit in renewed climate push

16th March 2021 - Author: Matt Sheehan

As part of its goal to transition towards net zero emissions, Swiss Re has revealed a new set of climate targets that include a full phase-out of thermal coal in treaty re/insurance by 2040.

Swiss ReIn 2023 Swiss Re will tighten its coal policy by introducing new thermal coal exposure thresholds for treaty re/insurance across its property, engineering, casualty, credit & surety and marine cargo lines of business.

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.

Other new targets include a 2025 carbon intensity reduction target of 35% for corporate bond and listed equity portfolio, and a long-term objective to exit coal-based assets for the portfolio by 2030.

Additionally, Swiss Re will aim to increase investments in renewable and social infrastructure by $750 million and expand green, social and sustainability bond exposure to $4 billion by the end of 2024 (from $2.6 billion at end of 2020).

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These new targets build on the already substantial decrease of the carbon intensities in Swiss Re’s corporate bond and listed equity portfolio of around 30% between 2015 and 2018.

“Climate change remains the biggest challenge we face as a society,” said Swiss Re CEO Christian Mumenthaler. “The stakes are high and require immediate attention. Signing up to net-zero emissions by 2050 and setting concrete climate targets are important first steps. What needs to follow now is action. We are moving ahead in all areas of our business to accelerate the transition towards net zero.“

Swiss Re’s targets have been defined in accordance with science and the Net-Zero Asset Owner Alliance Target Setting Protocol, which the reinsurer has played an instrumental role in developing, and which serves as a guide for the Alliance members.

“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,” said Chief Investment Officer Guido Fürer.

“While we have already made considerable progress by substantially cutting CO2 emissions of our portfolio, today’s announcement is another important step in the race to net-zero. As asset owners we can play a meaningful role, and I’m pleased to see momentum building amongst the investor community.“

For its own operations Swiss Re is committed to achieving net-zero emissions already by 2030, focusing primarily on emission reduction and sourcing 100% of its power from renewable sources.

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