SwissRe switch all assets to ESG indices

Reports in the FT and elsewhere today announce the important news that SwissRe now integrates Environmental, Social and Governance issues across all their equity and fixed income investment assets.

They are doing so by using benchmarks based on the highly regarded MSCI ESG methodology.

• The first section of the SwissRe media release (from their website) is reproduced below.
• SwissRe have also published a Responsible Investment report to explain further.

My opinion on this is that this is an unambiguous and important signal to investors.

Insurers and reinsurers are in the business of understanding and managing risk.  So, when a company with a reputation such as SwissRe  states that ESG should be formally integrated into investment processes investors should take note.

I would however urge caution with regard to terminology – the longstanding challenge of my area of business.  The FT and others refers to this as switching to ‘Ethical Indices’.

Whilst some will agree with this label others would not.

For many investors the use of the term ‘ethical’ implies that values based investment decision making  (eg avoiding armaments, tobacco or pornography).  There is of course a fine line in this regard, as demonstrated by Axa’s decision to exclude tobacco stocks across the board last year.

Given the wording of the SwissRe media release I would suggest that this shift in strategy relates entirely to sound longer term risk management – rather than making values based judgements.

Either way I very much welcome this display of leadership and hope many other investors and insurers will soon follow suit.

• For information on other investors who bring ESG into investment decision making see the ‘Corporate SRI Activity’ filter on staging.fundecomarket.co.uk .  (Please note the information we publish on this topic is not ‘whole of market’ as we rely on fund managers bringing this to our attention and responding to our surveys.)

My thanks go to our friends at Synaptics for bringing this important news to my attention!

As ever, I can be contacted on Julia@sriServices.co.uk .

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Swiss Re among first in the re/insurance industry to integrate ESG benchmarks into its investment decisions

06 July 2017, Zurich

• Swiss Re is among the first in the re/insurance industry to switch to benchmarks that systematically integrate environmental, social and governance (ESG) criteria
• Publication launched today by Swiss Re explains why ESG integration makes economic sense for long term investors
• Swiss Re selected benchmarks based on the MSCI ESG methodology for its equities and fixed income portfolios

Swiss Re announced today that it has already consistently integrated ESG considerations into its investment process since the start of 2017. The company is convinced that taking ESG criteria into account makes economic sense and reduces downside risks especially for long-term investors. By implementing ESG benchmarks, Swiss Re has taken a step forward from considering ESG as an “add-on” approach to making it an integral part of its investment process.