Are profitability and sustainability mutually supportive? We're convinced they are! Take a look at our new "Sustainable Investing" website - and see for yourself.
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Last year, the Pension Fund Swiss Re developed a strategy to integrate ESG (Environmental, Social and Governance) criteria into its investment process. Thus, an asset class overarching ESG and climate strategy has emerged which has improved the risk-return profile of our investments.
A milestone in the implementation of ESG criteria was the switch to best-in-class ESG benchmarks for the global equities single-investor fund and the foreign currency corporates and foreign currency government bond portfolios. This resulted in a double advantage: On the one hand, we have a more comprehensive understanding of the ESG risk exposure of the relevant investments, and on the other hand, we invest in companies that take greater account of ESG criteria.
We have supplemented this with targeted thematic investments. In the area of infrastructure debt, for example, we finance social housing in England and solar power plants in the United States. Also, the implementation of Swiss Re's coal and oil sands exclusion policies have already led to significant decarbonisation of our assets.
As of new, we are introducing exclusion guidelines in the area of oil and gas: We will no longer invest in the top 5% of the world's most carbon-intensive oil and gas production companies in the global equities single-investor fund and in all bond portfolios. The portfolio transition will be completed by July 2021. In the future, we will increase this limit to 10% and adjust the portfolio accordingly.
We are of the opinion, that these measures address the risk of stranded assets while making a positive contribution to a climate-friendly economy.
More information on our ESG and climate strategy can be found on our new website: Sustainable Investing.