Zurich to drop oil and gas producers lacking credible transition plans by 2030

Written by Adam Cadle

20/09/2024

Zurich is to drop oil and gas producers lacking credible transition plans by 2030.

In its Climate Transition Plan 2024, the insurer said it expects oil and gas producers to have “credible transition plans aligned to achieving net-zero by 2050, with interim targets and clear measurable commitments”. It added: “Those transition plans should be in place by 2030. As a last resort, we will then exit customers where transition risks are not sufficiently managed."

As an interim target on the path to net-zero by 2030, Zurich is targeting 55% reduction in the emissions intensity of its listed equity and corporate bond investments against a 2019 baseline, and a 45% reduction in the emissions intensity of its direct real estate investments against a 2019 baseline.

Since 2019, Zurich has reduced its emissions intensity by 43% in its listed equity and corporate bond portfolio, and by 25% in its direct real estate portfolio. Emission reductions in listed equity and corporate bonds were driven almost equally by changes in portfolio composition and structural emission reduction of its investee companies. Reductions in direct real estate were achieved by wider implementation of green electricity, introduction of smart metering devices, improvement of data and reporting quality and increasing the share of green certified buildings.

“To support aligning our portfolio with net-zero, we exclude thermal coal, oil sands and oil shales related assets above certain thresholds in our portfolios,” the insurer stated.

“Our exposure to project financing of fossil fuel assets is limited to our private debt portfolio. Therefore, we have agreed dedicated fossil fuel guidelines with our asset managers for these portfolios and exclude any thermal coal related assets. Furthermore, these portfolios will not finance oil and gas assets which are not aligned with science-based or government-issued regional or national 1.5°C pathways.”

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