Climate

This approach of the Pension Fund Swiss Re is inspired by that of Swiss Re. Consequently, there may be slight differences in the desired goals or purposes, which are due to the different laws and industry recommendations. 

As the transition to a climate-neutral economy progresses and regulations tighten, stranded asset risks are increasingly arising in the fossil energy sectors. The risk for long-term investors is that a changing regulatory environment may lead to a sharp decline in the value of a particular company or a particularly exposed sector, for example due to rising CO2 (carbon) taxes.

To prevent this risk, the Pension Fund Swiss Re seeks to implement when relevant and possible the Swiss Re's ESG framework for all single-investor funds.

As part of this, the Pension Fund does not invest in companies that generate 30% or more of their revenues from thermal coal mining or that use at least 30% thermal coal for power generation. Companies with more than 20% revenues from oil sands operations are also excluded from investments. In 2019, the Pension Fund Swiss Re additionally divested from mining companies that produce at least 20 million tonnes of coal per year and from power utilities with more than 10 gigawatts of installed coal fire capacity.

With the aim of continuously reducing the CO2 intensity of bond and equity investments, the Pension Fund will implement the revised Swiss Re oil and gas guidelines. As a result of this new policy, the Pension Fund no longer invest in the top 5% of the world's most carbon-intensive oil and gas companies as of July 2021. This threshold has been increased to 10% by July 2023.

The carbon intensity of the global equities single-investor fund, the foreign currency corporate bond portfolios and the Swiss real estate direct investments is regularly monitored and reported. By following the Swiss Re's risk appetite restrictions related coal and oil sands in the form of a divestment, the Pension Fund Swiss Re has taken significant steps to decarbonise these investment portfolios.

In addition to achieving risk-adjusted returns in line with the market, carbon-neutral investments also ensure the transition to a low-carbon economy. Suitable examples include investments in zero-emission infrastructure, such as renewable energy generation plants.

To this end, the Pension Fund Swiss Re monitors trends and is looking to expand its allocations to sustainable energy sources. With the current infrastructure debt mandate, the Pension Fund Swiss Re is invested in solar power plants and finances smart energy meters in the United Kingdom as well as photovoltaic systems in Germany.

Sustainable construction and renovation projects like energy-efficient building automation upgrades offer significant potential for reducing greenhouse gas emissions while achieving an attractive risk-return profile.

In its Swiss real estate direct investments, the Pension Fund Swiss Re is committed to following sustainability principles and applies environmental criteria through MINERGIE® certifications. By remaining focused on climate criteria, the Pension Fund Swiss Re has steadily reduced its carbon emissions in its Swiss real estate direct investments. The desired standards and certifications vary between the Pension Fund Swiss Re and Swiss Re as a result of the laws and industry recommendations for Swiss pension funds.