Swiss Re has started a policy where it will not provide insurance or reinsurance to businesses with more than 30 percent thermal coal exposure.
The policy, first announced in June 2017, is designed to help the carrier better manage carbon-related sustainability risks and support the transition to a low-carbon economy. AXA, SCOR and Zurich are also among insurers that have made changes to their coal underwriting policy.
Swiss Re decided to develop a thermal coal policy based on its commitment to the “Paris Pledge for Action” in 2015, when the company affirmed its strong commitment to the effort to limit global warming to 1.5°C – 2°C above pre-industrial levels. As a result, Swiss Re supports a progressive and structured shift away from fossil fuels.
“The implementation of the coal policy is a major step forward in ensuring that our business activities are aligned with the Paris Agreement and related national efforts,” Edi Schmid, Swiss Re’s group chief underwriting officer, said in prepared remarks. “We are working with our clients to find the best [coverage] that enable them to adapt to a low-carbon economy.”
The group-wide thermal coal policy is an integral part of Swiss Re’s Sustainability Risk Framework. Swiss Re consistently uses this framework for all underwriting and investment activities in order to minimize sustainability risks. The thermal coal policy applies to both existing and new thermal coal mines and power plants and applies to all lines of business and Swiss Re’s global scope of operations.
The 30 percent threshold applied is in line with the thresholds on the investment side, Swiss Re said. To contribute to a low carbon environment and actively mitigate the risk of “stranded” assets, Swiss Re by early 2016 stopped investing in companies that generate 30 percent or more of their revenues from thermal coal mining or that use at least 30 percent thermal coal for power generation, and Swiss Re divested from existing holdings.
Source: Swiss Re