As part of its efforts to transition to net-zero emissions in operations by 2030, Swiss Re has announced that it will increase its internal carbon levy to $100 per tonne as of 2021.
The new levy is considerably higher than the current levy of $8 per tonne CO2, and is set to gradually increase further to $200 per tonne by 2030.
Swiss Re says the levy will fund a compensation of residual operational emissions through carbon removal projects.
The reinsurer has also decided to further curb its flight emissions with a CO2 reduction target of 30% in 2021, relative to the 2018 benchmark.
This means that the currently suppressed business travel activity will not go back to the pre-COVID-19 levels.
“Today’s announcement is yet another proof point of how Swiss Re delivers on the climate action component of our sustainability strategy,” said Swiss Res Group Chief Executive Officer, Christian Mumenthaler.
“It also underscores our belief that leading companies can and must propel climate protection beyond mere compliance with current regulations.”
Swiss Re is a signatory of the ‘Paris Pledge for Action,’ and confirmed this position in 2019 by signing the UN Business Ambition for 1.5°C pledge.
It also became a founding partner of the UN-convened Net-Zero Asset Owner Alliance, thereby committing to net-zero emissions by 2050 on the liability and asset side.
For its own operations, Swiss Re committed to achieve net-zero emissions already by 2030, meaning all operational CO2 emissions that cannot yet be reduced need to be compensated by negative emissions.
To limit global warming to well below 2°C in accordance with the Paris Agreement climate science predicts the need for billions of tonnes of CO2 to be annually removed and stored until after 2050.
Emission reduction efforts therefore need to be complemented by the rapid scale-up of carbon removal capacity, and Swiss Re believes that the re/insurance industry can play a pivotal role in this process.
Earlier this year, Swiss Re announced that it would stop providing re/insurance to, or investing in, the most carbon-intensive oil and gas companies, as part of its sustainability targets.
In line with this policy, the company plans to gradually cut business support in underwriting and asset management to the world’s 10% most carbon-intensive oil and gas production by 2023.