Swiss Re and Zurich Insurance both have performed well in surveys on how companies are treating the issue of investments in coal and related environmental questions. A recent report however has a major rival of the two claim the top position.

The insurance industry has a new champion of sustainability – French insurance giant Axa, which has a strong Swiss division built around the former Winterthur insurance company.

The ranking was established by NGO-coalition «Insure Our Future», which compiled a report titled «Insuring Our Future – 2020 Scorecard on Insurance, Fossil Fuels and Climate Change». The coalition sees the insurance business uniquely positioned in the fight against climate change, with a key role to play in the transition to a carbon-dioxide-free economy. Insurers may not claim the headlines, but their role is essential when it comes to decisions about which project to implement. No new power station can start operating without adequate insurance.

The Former No. 1

The report lists 30 leading insurance companies with respect to their criteria for signing an insurance policy and for making investments in fossil energies and their dedication to taking the lead in the shift towards a green economy. The report sees Swiss Re and Zurich, the No. 1 and No. 2 in 2019, drop below Axa, the new No. 1.

Swiss Re had been in top position already in 2018. The report showed how the firm included coal, tar sands, and other major fossil fuels into its guidelines on the protection of the environment and, other than some rivals, comprised both facultative reinsurance as well as treaty insurance.

Comprehensive Coal Exit Strategy

Having tightened restrictions in 2019, Axa reached top scores with the most comprehensive coal exit policy in the industry. Together with Zurich, Axa is the only company to have ceased underwriting expansion plans for coal. It is still underwriting tar sand companies and hasn't yet taken measures to stop given coverage to oil- and gas-producing firms.

Swiss Re is closely behind and has a fairly strong commitment to the facultative reinsurance of fossil fuel projects. This includes the coverage for oil- and gas-producing companies, while it still provides such policies. Swiss Re ranks second in fossil fuel insurance after Axa, while dropping from 1st to 3rd spot in the ranking of fossil fuel divestment. In the climate leadership ranking, forward-looking criteria, Swiss Re claims position No. 10. Zurich is in 4th position on fossil fuel insurance, 3rd on divestment, and 3rd on leadership.

climate scoring grid

«Both Swiss Re and Zurich have broad expertise on the growing climate risks and effects and have committed to moving their investments and their insurance business in accordance with a 1.5°C-world,» said Asti Roesle, a climate-change, and finance-expert at Greenpeace Switzerland. 

But while both firms score well compared with most other firms, it won't suffice to make the necessary change happen: «We now urgently need more progressive steps from the two to accomplish the transition away from oil and gas.» 

Sustainability a Key Component

Swiss Re and Zurich Insurance didn't comment on their drop in the ranking. A spokesperson for Zurich told finews.com that sustainability remained a key component of its strategy and a driving force for the long-term success of the company.

As part of the commitment to a 1.5°C-world Zurich had updated its position in respect to some of the fossil fuels with the worst record on carbon dioxide, for instance coal, tar sands, and oil shales. The insurer remains part of the UN Net-Zero Asset Owner Alliance.