German ICMIF member R+V Versicherung is facing up to the challenges of climate change and has set itself the ambitious goal that its investment portfolio should be CO2-neutral by 2050.
R+V Versicherung sees climate change as one of the key societal challenges and believes that the financial world can make an important contribution to the transition to a greenhouse gas-neutral economy. As a cooperative insurer, R+V has attached particular importance to the topic of sustainability since it was founded 100 years ago. In terms of operational ecology including the consumption of electricity, water and paper, the insurer says it will be climate-neutral by 2025. R+V is also committed to sustainable products and services in the insurance business.
Net-zero in capital investment
Another milestone on the way to more sustainability is the climate target that R+V has now set itself in terms of its capital investment. Derived from international climate protection agreements and in accordance with the climate targets of the German Insurance Association (Gesamtverbandes der Deutschen Versicherungswirtschaft – GDV) and the National Association of German Cooperative Banks (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken – BVR), R+V is striving for greenhouse gas neutrality (Net Zero) across its entire investment portfolio by 2050.
As one of the leading life insurers and asset managers in Germany with an investment volume of more than EUR 130 billion, R+V has an important level of power to counteract climate change. “We have a great responsibility, which we also take seriously. Since the beginning of 2020, we have been pursuing a strategy for integrating sustainability criteria into the investment process, the so-called ESG integration strategy. This means that we control our cash flows according to the criteria E (environment), S (social) and G (governance),” explains CFO Marc Michallet, who is also the chairman of the R+V Sustainability Commission. “The new climate target will be a central part of this strategy.”
Transformation instead of exclusion
Aligning R+V’s entire investment portfolio with the new sustainability goals is a demanding undertaking that cannot be accomplished overnight says the cooperative insurer. Because investments must continue to achieve a good return despite the zero-interest rate environment. Ultimately, the top priority remains that the obligations to customers are guaranteed at all times. In its investment decisions, R+V Versicherung relies on transformation instead of the exclusion principle. The focus here is on financing the conversion to a sustainable economy. R+V accompanies companies on the way to ESG-compliant corporate management with excluding investments only used as a last resort.
Five-year steps to a climate-neutral portfolio
The roadmap to climate neutrality in 2050 is in place for R+V. The first interim goal is that by 2025, R+V wants to reduce the measured CO2 intensity in the asset classes equities and corporate bonds by 20 percent. “In these asset classes, we are invested in companies that currently account for around 95 percent of our calculated CO2 intensity,” explains Michallet. “We will then successively include additional asset classes and set further quantitative CO2 reduction targets in 5-year steps.”
R+V Versicherung already supports a large number of UN initiatives, such as the Global Compact (GC), the Global Reporting Initiative (GRI), the Principles for Responsible Investment (PRI), the Principles for Sustainable Insurance (PSI) and the Sustainable Development Goals (SDG) – in line with the EU Green Deal and the climate efforts of the German government.
R+V will be the host for the forthcoming ICMIF Meeting of Reinsurance Officials (MORO). The Meeting will be held at the head office of the R+V Group in the city of Wiesbaden (Germany) from Monday 16 May to Wednesday 18 May 2022. Learn more and register here.