Swiss Re, the Zurich-based insurance and reinsurance company, has announced it will no longer seek validation from the Science Based Targets initiative (SBTi) for its climate targets. The firm, however, has affirmed that its sustainability strategy remains unchanged, including its objective to achieve net zero greenhouse gas (GHG) emissions by 2050.
Swiss Re initially committed to the SBTi in 2019, setting a goal to reach group-wide net zero GHG emissions by 2050. This recent decision comes in the wake of a campaign launched by U.S. politicians opposed to environmental, social, and governance (ESG) initiatives. The campaign warns the SBTi and its financial sector participants about potential violations of antitrust and consumer protection laws related to their net zero commitments, particularly following the release of SBTi’s Financial Institutions Net-Zero (FINZ) Standard.
The FINZ Standard, released in July, enables financial firms to set net zero-aligned targets across various activities, including lending, investing, insurance, and capital markets. It requires financial institutions to publish a “fossil fuel transparency policy.” This policy mandates the immediate cessation of project finance linked to fossil fuel expansion and the phasing out of general finance to oil and gas companies involved in expansion by 2030, with the aim of transitioning portfolio energy activities to net zero by 2050.
In August, 23 U.S. State Attorneys General expressed concerns about these commitments, cautioning that adherence to SBTi standards could potentially breach federal and state antitrust laws, as well as state consumer protection laws, by colluding to restrict funding and insurance to the oil and gas sector.
Swiss Re has not provided a specific reason for its decision to pursue its sustainability goals independently of SBTi validation. The company aims to achieve net zero in underwriting by 2050 and has announced near- and medium-term targets to increase the share of companies aligned to net zero by 2050 within its re/insurance portfolios. Earlier this year, Swiss Re issued a Climate Transition Plan, reiterating its 2050 net zero underwriting goal and interim targets, including commitments to ensure that by 2025, 50% of its gross written premiums from oil and gas producers, and by 2030, 100% will come from companies committed to net zero by 2050.
In its statement, Swiss Re emphasised its continued focus on implementing its sustainability strategy and supporting clients in their net-zero efforts, stating, “With its Climate Transition Plan, Swiss Re has set interim milestones on the path to net-zero. Our focus now is on further implementing our sustainability strategy and supporting our clients in their net-zero journey through this highly dynamic environment.”
