Zurich has announced it is “intensifying action” in support of efforts to address climate change, with the insurer setting new targets for its investments and operations and urging companies in which it invests to also set targets.
The insurer set goals including a 25 percent cut in carbon intensity planned for listed equity and corporate bond investments by 2025 and a 30 percent cut targeted for direct real estate investments.
It will also target a 50 percent cut in emissions from operations by 2025 and 70 percent by 2029.
In addition, Zurich pledged to use influence as an investor and insurer to press for change. The insurer urged companies it invests in to set their own targets for a 1.5⁰C future.
The insurer over a period of at least two years will engage with companies directly and through organisations such as Climate Action 100+ and the Alliance. Should engagement fail and companies refuse to set targets after due dialogue, Zurich said it will vote against board members at shareholder meetings.
“The group is committed to using every lever available – investments, operations, and products and services – to accelerate the transition to a net-zero emission economy,” the insurer explained.
It added: “Zurich is setting new climate targets for its investments and operations and, crucially, will help finance the transition and require the companies it invests in to set targets aligned with the Paris Agreement.”
Zurich pledged to take a leading role in developing industry-wide methodologies to measure emissions from insurance underwriting.
The action plan is part of Zurich’s ambition to be one of the most responsible and impactful businesses in the world.
Zurich said the new measures underscore a commitment made in 2019 when it became the first insurer to sign the Business Ambition for 1.5°C Pledge to limit global warming.
“Our role as an insurer is to protect people and climate change is the greatest risk there is,” said group CEO Mario Greco. “We are using our influence as a global insurer and investor to drive deep cuts in emissions, because working with others is where we can make the biggest impact.”
The executive added that Zurich’s own operations have been carbon neutral since 2014, and the insurer has since been focused on reducing our remaining emissions.
“Over the next few years, big cuts will come from measures such as switching to renewable power and electric vehicles, savings in data centres and curbing business travel,” he said.
The move comes against a background of (re)insurance industry companies taking an increasingly proactive stance on ESG issues.
Zurich has already taken a number of actions.
In 2017 it placed restrictions on underwriting or investing in companies with exposure to thermal coal, and expanded the policy in 2019.
At the end of 2020, Zurich had engaged with more than 250 companies and stopped doing business with or investing in more than one-third of them. This resulted in it not renewing more than $30mn in gross written premiums and divesting assets worth nearly $500mn since 2017.
Zurich said that, as of the end of 2020, discussions were ongoing with 42 percent of the companies close to or exceeding its climate policy limits.