Climate action

To address the risks and opportunities arising from climate change, Swiss Re’s Responsible Investing strategy includes climate action. Swiss Re aims to transition its investment portfolio to net-zero GHG emissions by 2050, supported by the decarbonisation levers jointly transition and manage portfolios. 

In 2020, Swiss Re set initial interim climate targets for 2025 which were achieved as of year-end 2024. In 2024, Swiss Re set new interim targets for 2030, guided by the Net-Zero Asset Owner Alliance’s (NZAOA) Target-Setting Protocol (version 4). 

Jointly transition

Swiss Re considers engagement with the real economy an integral part of its contribution to limiting global warming to 1.5°C. It has therefore implemented an internally developed Engagement Framework to engage investee companies in its corporate bond and listed equity portfolios and aims to further focus engagement on the implementation of a climate transition plan. Close collaboration with the external investment managers of both asset classes is crucial to executing the Engagement Framework. Beyond that, Swiss Re also aims to engage with external investment managers across asset classes on their development and execution of a climate transition plan. 

Manage portfolios

Swiss Re monitors and manages the GHG intensity of its direct corporate bond and listed equity portfolio, and has defined interim emission reduction targets for this portfolio. This portfolio accounts for 32% of the total investment portfolio. Swiss Re uses portfolio reallocations to manage GHG intensities and restrictions to actively address stranded asset risk. Portfolio reallocations focus on sector weighting and security selection within the investment portfolio, potentially shifting invested capital based on the GHG intensities of the underlying assets. 

Opportunities

Swiss Re considers investment opportunities that align with its risk appetite and have the potential to generate attractive long-term returns.  

Swiss Re aims to invest in green bonds whose proceeds are used exclusively to finance projects that support a low-emissions economy and/or protect the environment. Swiss Re’s internal and external investment managers are contractually required to favour such bonds over traditional bonds, provided all other factors are equal. This approach has proven effective in advancing Swiss Re’s green, social and sustainability bond investment target, as reflected in the positive development of the amount invested in green bonds over the past years.  

Swiss Re aims to finance climate solution infrastructure projects that generate attractive risk-adjusted returns. This includes loans to finance projects that support climate change mitigation, including transition enablement, and adaptation.  

Swiss Re conducts assessments of the current and future status of new real estate investments with respect to net-zero alignment and the use of sustainable materials. For investment properties that Swiss Re already holds, Swiss Re assesses them against the Carbon Risk Real Estate Monitor (CRREM) benchmark. 

Risks

Swiss Re integrates sustainability and climate considerations into its investment process, enabling the identification and assessment of risks that may impact its future financial performance, including risks arising from climate change. Swiss Re identifies and assesses transition and physical risks arising from climate change across different climate change scenarios. The aim is to evaluate the investment portfolio’s sensitivity under the three NGFS scenarios: Orderly, Disorderly and Hot house world.