ESG integration is gaining momentum not only in the financial industry but in the entire economy. Many companies are increasing the level of disclosure on their responsible investing approach. This increasing investor interest is also evidenced by the growth of sustainably invested asset volumes.
As one of the first in the re/insurance industry, Swiss Re switched to ESG benchmarks for its actively managed equity and credit portfolios. Since the announcement last year, Swiss Re has progressed on its ESG journey, now applying ESG criteria to close to 100% of its investment portfolio.
A year after its main transition, Swiss Re launched a new publication to share first-hand insights and key learnings from the process of implementing ESG criteria.
Guido Fürer, Swiss Re's Group Chief Investment Officer, says: "The empirical evidence confirms our initial findings: ESG benchmarks improve the risk-adjusted return profile over the long term. While it is a journey, we are convinced of being on the right track and reaffirm our commitment to responsible investing."
The publication provides insights into how ESG considerations have been reflected across Swiss Re's entire investment portfolio.
In the publication, Swiss Re also looks at key impediments that prevent responsible investing from becoming a standard approach.
While significant progress has been made in the harmonisation of methodologies and standards for ESG, Swiss Re still sees significant improvement potential concerning the definition of standardised key metrics and increasing the importance of ESG in financial analysis. In addition, the market volume of ESG investment products remains low.
Guido Fürer says: "We continue to call for a joint effort of the public and private sector to overcome the hurdles preventing many investors from investing responsibly and with a long-term focus."
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