Munich Re, one of Europe’s largest insurance companies, and the world’s biggest reinsurer, announced the launch of a series of new greenhouse gas (GHG) emissions reduction targets for its insurance and investment portfolios, in addition to goals to increase its investments in climate solutions and to engage with high-emitting companies in its investment portfolio.
The new targets, forming part Munich Re’s new 5-year “Ambition 2030” strategy, follows an announcement earlier this year by the company that it had decided to withdraw from a series of climate-focused industry coalitions, including the Net Zero Asset Owner Alliance (NZAOA), the Net Zero Asset Managers Initiative (NZAM), Climate Action 100+ (CA100+) and the Institutional Investors Group on Climate Change (IIGCC), citing legal and regulatory pressures and climate disclosure complexity.
Despite leaving the climate groups, in its new update, Munich Re reiterated that it is retaining its commitment to reduce GHG emissions across its entire insurance, reinsurance and investment portfolios to net zero by 2050.
In its insurance and reinsurance businesses, Munich Re’s new 2030 targets include absolute reductions in portfolio emissions for insured thermal coal mining of 35% and from thermal coal power of 45%, on a 2025 basis, and to reduce the GHG emissions intensity related to clients with reported emissions in its Facultative & Corporate Global Portfolio by 20%. The company is also retaining its existing goal to phase out the insurance and reinsurance of thermal coal activities by 2040, and, after achieving a 96% emissions reduction from insured oil and gas production since 2020, committing to no expansion in its remaining oil and gas portfolio.
In its investment portfolio, Munich Re’s 2030 decarbonization targets include a 12% reduction in emissions intensity for listed equities and corporate bonds, 20% reductions in emissions intensity for direct investments in infrastructure and direct investments in private equity and debt, as well as for real estate equity, and a 12% absolute emissions reduction from oil and gas equities and bonds, on a 2025 basis.
In addition to the investment portfolio emissions reduction goals, Munich Re also announced new targets to increase “climate-tackling” investments – including asset classes of certified forestry, certified real estate and energy-related levers – by €1.5bn by the end of 2030 compared to 2025, and to have reached 30 active or completed engagements with high emissions companies between 2020 and 2030.
Munich Re also announced a commitment to divest all thermal coal investments held in listed equities and corporate bonds and to cease to conduct new direct alternative investments in thermal coal by the end of 2030, bringing forward a prior target to phase out thermal coal by 2040.
Joachim Wenning, Chair of the Board of Management at Munich Re, said:
“We remain committed to our long-term aim of achieving net zero greenhouse gas emissions by 2050. This applies, as in the past, to both our insurance business and our investment portfolio.”
