Aligning Insurance Portfolios With The Paris Agreement

The registration period for Switzerland, Austria and Liechtenstein has now expired. Since July 2020, more than 170 Swiss investors, including some of the country`s largest banks, insurance companies and pension funds, have signed up for the climate impact test, a new step in the global use of the tool. The results will be published in early November. For more information, check out our current newsletter. The landahe report, published in collaboration with the Federal Office of the Environment: “Bridging the Gap: Measuring Progress on the Climate Goal Alignment and Climate Actions of Swiss Financial Institutions”. In the run-up to the 2019 UN climate change summit, the Swiss and Dutch governments presented a new initiative to measure and align financial flows with the 1.5-C target set by the Paris Agreement. The results show that investments are currently supporting global warming by 4 to 6 degrees Celsius. However, there are big differences between different insurance companies and pension funds. Some are already investing in climatic conditions, while others prefer certain sectors or investment classes. However, in other sectors, such as renewable energy development, the average investor tends to lag behind the global market. The tests can contribute to a new change of mentality in the Swiss financial sector.

Event 3 – Use of insurance for the SDGs, 8 July 2020, 13:00-15:00 MESZ The first assessments began in early 2020 and involve, in addition to Switzerland and the Netherlands, the governments of Austria, Denmark, Italy, Luxembourg, Norway, Portugal, Spain and Sweden. Private financial institutions, their industry representatives, public financial institutions and supervisory authorities may also participate voluntarily. The expanded model will then be made available to asset managers and banks, in addition to Swiss pension funds and insurance. The aim of this event is to catalyze an ambitious, collaborative and achievable global agenda for insurance and sustainable development. This global sustainable development agenda includes the current pandemic situation and the resulting sustainable landscape, managing sustainable development risks in insurance transactions, using products and insurance solutions for the SDGs, and decarbonizing insurance and reinsurance portfolios. As part of this commitment, participating governments and financial institutions will use the PACTA methodology of the 2-Investment Initiative to compare their investments and funding with climate benchmarks. “Achieving net zero doesn`t just mean reducing emissions and pursuing today`s business models,” said Allianz President and Allianz SE Board Member, Gunther Thallinger. and that the group would work with boards ready to adapt their business models. Originally, the scope of PACTA 2020 valuations focused on asset portfolios. Subsequently, 2DII and several European banks worked together to develop a framework for assessing banks` credit accounts according to the PACTA methodology.

More than 4,000 portfolios of 179 financial institutions representing about 80% of the market were evaluated in an initial study of the Swiss financial sector to guide the Swiss financial sector towards climate targets. Analysis of more than 3,000 billion financial assets shows progress in adapting to climate targets, but large gaps remain.