Climate strategy and pathway to net zero

At Helvetia, we are committed to taking decisive action on climate change and supporting the global transition to a low-carbon economy. Our climate strategy outlines a credible approach to climate action that aligns with our business objectives and stakeholder expectations. By setting clear targets, implementing robust policies and continuously monitoring our progress, we contribute to global climate goals while maintaining our competitive edge in the insurance market.

Our climate strategy embraces the concept of double materiality, acknowledging both the financial risks and opportunities presented by climate change, as well as the external impact of our business activities on the climate.

While our Climate Disclosure provides a detailed overview of the financial implications, our climate impact strategy focuses specifically on minimizing the external effects of our business activities on the climate.

Our climate impact strategy

The primary goal of our climate impact strategy is to contribute meaningfully to climate change mitigation and adaptation while maintaining our good reputation and supporting our market position across all segments. We have set net-zero targets according to the Paris Climate Agreement for own operations (by 2040) and for our investment and non-life insurance portfolio (by 2050).

We align with international climate and sustainability initiatives, including CDP, PRI, and UN Global Compact. Our strategy sets realistic and achievable mid-term targets that position us above the industry average.

While an important part of our climate impact strategy deals with our contributions to decarbonization, we also want to use our role as an insurer and asset manager to take advantage of the opportunities created by a more sustainability-oriented economy and society. Additionally, we ensure compliance with legal requirements such as CSRD, ESRS, and the Swiss Ordinance on Climate Disclosure. We also aim to enhance transparency through comprehensive climate reporting to our stakeholders and investors.

Own operations

We have already significantly reduced our operational greenhouse gas (GHG) emissions in recent years and are continuously investing in the energy efficiency of the buildings used for operations. To achieve net-zero emissions in our operations we are implementing a carbon reduction pathway for scope 1 and 2 emissions, with a focus on business travel, buildings, and electricity consumption. We will transition to electric vehicles for our company fleet and business travel, and we prioritize reducing fossil fuel use in our buildings and use renewable energy for heating and cooling buildings. Furthermore, we will maintain the purchase of 100% renewable electricity and fulfil the RE100 commitment. Additional measures include air travel, waste management, paper and water consumption, and we will also reduce our scope 3 emissions.

The interim targets for own operations are as follows: measured against the emissions of 2023, we will have reduced our emissions in own business operations by around 30% by 2030, by 55% by 2035 and by a total of 80% by 2040. In 2040, we plan to neutralize the remaining 20%, which we cannot reduce any further, by purchasing CO2 removal certificates.

Reducing emissions from own operations is a priority for us, but with our carbon offsetting approach, we are also taking responsibility for our residual emissions now by financially supporting verified climate mitigation projects in proportion to our remaining scope 1 and 2 emissions.
Operational implications include a decentralized management approach led centrally by the Group, integration into executive management targets and variable remuneration, and changes to real estate management practices.

Investments

As an asset owner, we are dedicated to aligning our investment portfolio with the goals of the Paris Agreement. By 2050, we aim to achieve a net-zero emission portfolio. Our strategy uses individual approaches for the different asset classes.

For directly held real estate in Switzerland, we have defined an emission reduction path and the specific corresponding measures and started their implementation in 2021. For listed equity and corporate bonds, the measures include focusing on our top 20 portfolio companies in terms of GHG emissions. We set mid-term targets to increase the proportion of these companies with credible net-zero targets aligned with the Paris Agreement by implementing an active ownership strategy starting in 2025. Through engagement, we will encourage investee companies to transition to net zero.

For the equity and corporate bond portfolio, the targets are of an indirect nature. By 2030, 60% of our top 20 contributors to the portfolio footprint need to have set net-zero targets approved by the SBTi, 80% by 2035, and 100% by 2040. By prioritizing counterparties that have the greatest impact on our carbon footprint, we are ensuring that the most significant sources of emissions are addressed. This strategic focus on the largest contributors will enable us to significantly reduce the GHG footprint of our equity and corporate bond portfolio, while building up the experience and know-how to expand our approach to cover more of our investments, supporting the achievement of our net-zero target in the investment portfolio.

Over the next few years, we will work on expanding the scope of our climate measures to cover more of our total investments, adding portfolio segments and asset classes to the transition plan. Additionally, our Fossil Fuel Policy guides our investments in the fossil fuels sector and sets the target to phase out coal-related investments and business connected to unconventional oil and gas by 2040. In addition, we will further develop our investment processes to take environmental factors, in particular greenhouse gas emissions, into account.

The decarbonization strategy of asset management is centrally managed by Group Asset Management and integrated into the overall responsible investment strategy of the Helvetia Group.

Non-life insurance business

In the insurance business, our strategic approach is to continuously reduce indirect emissions of the non-life insurance portfolio. In particular, we are targeting the energy sector with interim targets and measures. Our first step is to implement the Fossil Fuel Policy, including the exit of coal-related business by 2040 (2035 in OECD countries). We also have additional criteria that exclude certain oil and gas-related business, and we will integrate climate-related data into our non-life insurance business processes. To track our progress in the energy sector, we monitor metrics such as the proportion of business volume related to thermal coal and companies with credible net-zero strategies.

Interim targets for non-life insurance business: for the energy sector, we have set ourselves medium-term targets for the proportion of customers pursuing a greenhouse gas reduction path in line with the Paris Agreement. The proportion of these customers is to be continuously increased. By 2030, 30%, by 2035, 70%, by 2040, 90%, and by 2045 100% of our oil- and gas-related business volume is to come from companies committed to align to net zero by 2050.
Furthermore, we are conceptualizing measuring our GHG emission footprint of the overall non-life insurance portfolio to further develop our strategy and track our progress.

Finally, an important part of our climate strategy in the non-life insurance business concerns the expansion of sustainable products that support the transition to a more climate-friendly economy and society. We want to actively exploit the business opportunities offered by decarbonization. These relate to solutions for renewable energies, public infrastructure and mobility. Here we are well positioned with dedicated solutions and know-how.