How Swiss Re Is Embracing the Climate Challenge

Climate change has moved from a future threat to a present reality for the insurance industry. Over the past several years, global insured losses from natural catastrophes have exceeded $100 billion annually as 2024 marked the fifth consecutive year above this threshold. Reinsurers like Swiss Re, whose business is built on understanding risk, warn that some regions may even become “uninsurable” as climate-related disasters intensify. The Swiss Re Institute projects that, without urgent action, rising temperatures could slash global GDP by up to 14% (around USD 23 trillion) by 2050. 

💡 Swiss Re Institute research warns that unabated climate change could shrink global GDP by as much as 14% that is roughly USD 23 trillion by 2050.

In this context, the insurance and reinsurance sector sits at a crossroads. Swiss Re and its peers are not only paying out on increasingly extreme weather events but also recalibrating their entire strategy for a warmer world.

 

Swiss Re’s former Group CEO Christian Mumenthaler said “Climate change remains the biggest challenge we face as a society. The stakes are high and require immediate attention.”

 

He said that while pledges like net-zero by 2050 are important first steps, “what needs to follow now is action. We are moving ahead in all areas of our business to accelerate the transition towards net zero.” This sense of urgency backed by hard data and financial realities is driving Swiss Re’s climate and sustainability agenda.

 

A Sustainability Strategy for Net Zero and Resilience

 

Swiss Re’s response to the climate challenge is anchored in its Group Sustainability Strategy (GSS) 2023–2025, which focuses on two overarching ambitions: advancing the net-zero transition and building societal resilience. In practice, this means Swiss Re is working to decarbonise its own business and help drive the global shift to a low-carbon economy, while also using its risk expertise to help communities adapt and thrive despite mounting environmental risks.

Under the net-zero transition ambition, Swiss Re has committed to achieving net-zero greenhouse gas (GHG) emissions by 2050 across all its activities spanning its underwriting (insurance and reinsurance portfolios), investments, and operations. To turn this long-term goal into concrete action, the company in 2024 published its inaugural Climate Transition Plan, fully integrated into the Sustainability Report 2024. This plan lays out interim targets and a clear roadmap for decarbonising each part of the business, in line with the latest climate science and Switzerland’s new climate disclosure requirements. Notably, Swiss Re met all its climate-related targets for 2024 and is on track with longer-term milestones.

Equally important is Swiss Re’s second sustainability ambition: building societal resilience. This refers to the company’s efforts to close the “protection gap” by expanding insurance solutions for climate risks and other sustainability challenges. In 2023, for instance, Swiss Re provided USD 5.7 billion in natural catastrophe re/insurance coverage and reinsured 212 million life and health policies, extending financial protection to more people and communities at risk. The following year, its nat cat premiums grew to USD 5.8 billion, with over 200 million life and health policies in force, indicating continued support for global resilience. From innovative disaster covers to partnerships for affordable health insurance in emerging markets, Swiss Re sees its core business as part of the solution to society’s sustainability challenges.

 

Transitioning the Underwriting Portfolio

 

• Swiss Re sees its underwriting portfolio as one of the most effective levers for climate action. By choosing which clients and sectors to insure or reinsure, the company can influence real-world emissions. It sets clear criteria that prioritize low-carbon business models and limits coverage for high-emission industries.

• The company introduced a thermal coal policy in 2018 and has since strengthened it. It plans to fully phase out thermal coal-related re/insurance by 2030 in OECD countries and by 2040 in the rest of the world. In 2020, Swiss Re also revised its oil and gas policy, cutting ties with the top 10% of the highest-emitting upstream projects by 2023.

• Swiss Re’s strategy now goes beyond exclusions. It aims to drive transition by setting interim climate targets and supporting clients aligned with the Paris Agreement. In 2023, it disclosed the emissions tied to its insurance portfolios for the first time and committed to science-based underwriting goals.

• The company targets 50% of its oil and gas underwriting premiums to come from firms committed to net-zero by 2025, reaching 100% by 2030. This means only companies with credible climate transition plans will remain in Swiss Re’s insured portfolio within the next five years.

• To support this shift, Swiss Re screens all underwriting transactions for ESG risks. In 2023 alone, it reviewed more than 108,000 transactions. It also continues to back low-carbon infrastructure, providing insurance for nearly 14,772 renewable energy installations, including wind and solar projects.

This two-track strategy, exiting carbon-heavy sectors and supporting sustainable ones positions Swiss Re as both a climate risk manager and an enabler of the net-zero transition.

💡 By 2030, Swiss Re plans to source 100% of its oil and gas re/insurance premiums from clients aligned with net-zero by 2050, up from a 50% alignment target in 2025.

 

Responsible Investing for a Low-Carbon Future

 

On the asset management side of the house, Swiss Re has made equally bold moves to align its investments with a low-carbon future. As an institutional investor managing tens of billions, Swiss Re joined the UN-convened Net-Zero Asset Owner Alliance and committed its portfolio to net-zero emissions by 2050. The company set an early interim goal to cut the carbon intensity of its corporate bond and listed equity holdings by 35% by 2025 (relative to a 2018 baseline). Impressively, Swiss Re reached this milestone ahead of schedule: by the end of 2023 it had slashed the weighted carbon intensity of that investment portfolio by 45% compared to 2018. In practical terms, this was achieved through a combination of divesting from high-carbon assets, shifting capital to greener sectors, and engaging with investee companies on their climate strategies.

Capital reallocation has been a major theme. Swiss Re set a target to expand its green, social, and sustainability bond holdings to USD 4 billion by 2024, a goal it surpassed. By year-end 2023, Swiss Re held USD 4.4 billion in green, social, and sustainability bonds, exceeding its initial target and signalling strong support for projects with positive environmental and social impacts. The company also earmarked an additional $750 million for investments in renewable energy and social infrastructure, recognizing these as both prudent investments and drivers of sustainable development. All new investment decisions incorporate ESG criteria, and Swiss Re was one of the first in the insurance industry to switch its entire portfolio to ESG benchmarks back in 2017.

Perhaps most critically, Swiss Re uses its influence as a shareholder and creditor to push for change. The firm reports that it engaged with the vast majority of its top emitters, 75% of the 20 largest carbon emitters in its bond portfolio to encourage alignment with a 1.5°C climate trajectory. This kind of stewardship involves active dialogue and voting to ensure the companies Swiss Re invests in are managing climate risks and setting science-based targets. As Swiss Re’s CIO put it, engaging with portfolio companies on climate not only “propels the transition to a net-zero emissions economy” but also improves long-term risk-adjusted returns for the investor.

Greening Operations and “Doing Our Best, Removing the Rest”

 

• Swiss Re has committed to reaching net-zero emissions from its own operations by 2030, ahead of its 2050 targets for underwriting and investments. The company follows a simple principle: reduce emissions as much as possible, then neutralize the rest using high-quality carbon removals.

• Since 2020, all Swiss Re offices have been powered by 100% renewable electricity. It has maintained operational carbon neutrality through its Greenhouse Neutral Programme, launched in 2003. Current efforts focus on cutting absolute emissions, especially energy consumption and travel-related impact.

• Business air travel, once a major emissions source, has seen a sustained drop. In 2023, emissions from air travel remained over 60% below 2018 levels. The company reduced air miles by more than half compared to pre-pandemic norms, significantly surpassing its initial 30% reduction target.

• To reinforce emission reductions, Swiss Re introduced an internal carbon levy of USD 100 per tonne in 2021, rising to USD 123 by 2023. Each department is charged for its carbon output, with funds used to purchase permanent removals. The company became an early customer of Climeworks’ direct air capture, moving away from offsets and helping scale future-focused carbon removal solutions.

 

An Ongoing Journey

 

Swiss Re’s climate transition efforts and ESG strategy illustrate how a large financial institution can translate high-level ideals into measurable action. In just a few years, the company has hit notable milestones: sharply reducing the carbon intensity of both its investments and operations, introducing market-leading policies on coal and oil underwriting, and embedding sustainability goals into the fabric of its business. Its Sustainability Reports for 2023 and 2024 provide transparent tracking of these metrics and hold the company accountable. Importantly, Swiss Re’s tone is balanced that is optimistic about solutions, yet realistic about challenges. After all, the company exists to manage risk, not to avoid it. In the face of a complex global threat like climate change, Swiss Re is choosing to lead by example, integrating ESG considerations into every facet of its enterprise rather than treating them as side issues.

This approach carries lessons beyond insurance. It demonstrates that setting ambitious targets (net-zero by 2050, coal exit by 2030, etc.) is only the starting point; real credibility comes from interim progress and willingness to adapt strategy along the way. Swiss Re has shown a willingness to refine its path, for instance, it decided in 2025 to pursue its climate goals without seeking external validation from the Science Based Targets initiative, reaffirming that its “sustainability strategy remains unchanged” despite shifting regulatory winds. The clear message is that Swiss Re’s climate commitment is internally driven, grounded in the company’s long-term interests and responsibilities, not just external accolades.

As climate risks continue to mount, Swiss Re’s dual focus on mitigation (through net-zero transition) and adaptation (through resilience-building) positions it as a forward-looking leader in the financial sector. The journey is far from over, like all companies, Swiss Re will face hurdles in balancing short-term pressures with long-term sustainability goals. But its progress so far offers a hopeful narrative: with data-driven pragmatism and a broad vision of stakeholder value, even a 160-year-old reinsurer can innovate and transform itself for the greener economy taking shape. In doing so, Swiss Re is not only future-proofing its own business, but also helping to safeguard communities and the planet. That may not solve climate change single-handedly, as Mumenthaler pointed out, “the insurance and reinsurance industry cannot solve climate change,” yet it is an indispensable part of the solution. By pricing risk and rewarding resilience, firms like Swiss Re are nudging the world toward more sustainable choices one policy and one investment at a time, all while building a safer foundation for the future.

 

Ultimately, Swiss Re’s climate and ESG strategy reflects a simple conviction: what is good for the planet and society can and must be good for business as well. Swiss Re’s own leadership said, the company will continue “conducting business in a sustainable manner, thereby delivering on our vision to make the world more resilient.” 

 

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