80 per cent of private insurers’ investments are linked to sustainability criteria. Companies are also participating increasingly in alliances such as the Net-Zero Asset Owner Alliance. This is showcased in the Sustainability Report 2021 of the Swiss insurance industry.
The Sustainability Report 2021, published by the Swiss Insurance Association (SIA), reports on developments in the ecological, financial and social sustainability activities of insurers operating in Switzerland. The industry contributes 4.2 per cent to gross domestic product and is a major investor, with cumulative investment capital of CHF 545 billion. The fact that 80 per cent of self-managed investments take ESG (environmental, social, governance) criteria into account in the investment process reflects the industry’s commitment to sustainability. A majority of companies have internal guidelines in place with provisions on sustainable investment, the exclusion of certain investments and the exercise of voting rights. Exclusion policies were the most frequently used approach, with a further eight companies implementing them in 2021. This means, for example, that 30 private insurers exclude investment in companies that generate revenue from thermal coal mining or which use a certain proportion of coal for power generation. ‘Smaller insurance companies are also reviewing their strategic positioning and focus in terms of sustainable investing,’ says SIA CEO Urs Arbter.
Climate risk with direct impact on core business
The insurance industry has a natural interest in environmental sustainability, as climate-related risks and extreme weather conditions have a direct impact on the core non-life insurance business. The insurance industry has an interest in keeping premiums as low as possible in order to be able to offer its customers attractive products. After all, insurance companies also make a key contribution to achieving the Paris climate targets. But the term ‘ESG’ does not cover all essential aspects. ‘Environmental sustainability can be achieved only if there is financial and social sustainability,’ comments Arbter.
Download the full report:
Sustainability Report 2021 | SIA (svv.ch)