Swiss Re Abandoned Ambition for SBTi Accreditation for Net Zero Objectives
Swiss Re, a leading insurance and reinsurance company based in Zurich, has announced a change in its approach to the Science Based Targets initiative (SBTi). The company will no longer pursue SBTi validation for its climate targets, but its sustainability strategy remains unchanged.
The company's statement emphasises its commitment to further implementing its sustainability strategy and supporting its clients in their net-zero journey, even in this highly dynamic environment. Swiss Re initially committed to the SBTi in 2019, aiming to reach group-wide net zero greenhouse gas emissions by 2050.
This decision by Swiss Re follows a recent launch of a campaign by anti-ESG politicians in the U.S. against the SBTi and its financial sector participants. The campaign was initiated after the SBTi's release of its Financial Institutions Net-Zero (FINZ) Standard.
The FINZ Standard, launched in July, sets out requirements for financial institutions to achieve goals aligned with the new standard. Among the key requirements is the publication of a "fossil fuel transparency policy." Financial institutions are also required to end general purpose finance to oil and gas companies involved in expansion by 2030, and to transition portfolio energy activities to net zero by 2050.
Swiss Re has set its own ambitious targets to increase the share of companies aligned to net zero by 2050 in its single risk re/insurance portfolios. The company has also set an ambition to reach net zero in underwriting by 2050. Swiss Re published a Climate Transition Plan earlier this year, which reiterated its 2050 net zero underwriting goal, as well as its interim goals.
The Climate Transition Plan commits to having 50% by 2025, and 100% by 2030 of gross written premiums from oil and gas producers in its single-risk property and general liability portfolios to come from companies committed to align to net zero by 2050. The plan also requires Swiss Re to publish policies to immediately end project finance explicitly linked to fossil fuel expansion activities.
Meanwhile, Shell, another major player in the industry, has announced that it will no longer participate in the certification of climate targets by the SBTi. However, Shell's climate strategy approach remains unchanged, including its goal to achieve net-zero greenhouse gas emissions by 2050.
The U.S. State Attorneys General published a letter warning that the SBTi, and financial institutions that commit to the SBTi standards, risk violating federal and state antitrust laws as well as state consumer protection laws by implicitly colluding "to cut off funding and insurance to the oil and gas industry."
Despite these developments, Swiss Re's spokesperson confirmed that the firm's sustainability strategy remains unchanged, with its focus on further implementing its sustainability strategy and supporting its clients in their net-zero journey.
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