Swiss Re yesterday started the implementation of its thermal coal policy announced in June 2017. Under the coal policy, Swiss Re will not provide re/insurance to businesses with more than 30% exposure to thermal coal across all lines of business.
This is a further step in refining Swiss Re’s approach to managing carbon-related sustainability risks and supporting the transition to a low-carbon economy. The decision to develop a thermal coal policy was based on Swiss Re’s commitment to the “Paris Pledge for Action“ in 2015, when Swiss Re affirmed its strong commitment to the effort to limit global warming to 1.5°C – 2°C above pre-industrial levels. As a result, Swiss Re supports a progressive and structured shift away from fossil fuels.
Mr Edi Schmid, Swiss Re’s group chief underwriting officer said, “The implementation of the coal policy is a major step forward in ensuring that our business activities are aligned with the Paris Agreement and related national efforts. We are working with our clients to find the best solutions that enable them to adapt to a low-carbon economy.“
The group-wide thermal coal policy is an integral part of Swiss Re’s Sustainability Risk Framework. Swiss Re consistently uses this framework for all underwriting and investment activities as to minimise sustainability risks.
The thermal coal policy applies to both existing and new thermal coal mines and power plants, and is implemented across all lines of business and Swiss Re’s global scope of operations.
The 30% threshold applied is in line with the thresholds on the investment side. To contribute to a low carbon environment and actively mitigate the risk of “stranded“ assets, Swiss Re already by the beginning of 2016 stopped investing in companies that generate 30% or more of their revenues from thermal coal mining or that use at least 30% thermal coal for power generation, and Swiss Re divested from existing holdings.
Furthermore, Swiss Re consistently integrates Environmental, Social, and Governance (ESG) criteria in its investment process and was among the first re/insurance companies to switch to ESG benchmarks for its actively managed equities and credit portfolios. At the same time, Swiss Re is convinced that improving energy efficiency and developing low-carbon technologies, including insurance coverages and investments in renewable energy sources, are critical to reducing greenhouse gas emissions and securing future energy supplies.