ICMIF member Vaudoise Assurances (Switzerland) stands out when compared to other Swiss financial institutions in terms of alignment of its financial portfolios to the climate objectives of The Paris Agreement.
Vaudoise took part in the Paris Agreement Capital Transition Assessment (PACTA), a climate-alignment test developed by the 2° Investing Initiative (2DII) and conducted in Switzerland by the Federal Office for the Environment (FOEN) in cooperation with the Swiss State Secretariat for International Financial Matters (SIF).
More than 170 Swiss financial institutions, banks, insurance companies and pension funds participated in the exercise on a voluntary basis. Alignment indicators measured how well Vaudoise’s investment portfolios are aligned with the climate objectives of The Paris Agreement to keep global temperature increases well below 2°C. The PACTA analysis focuses on the sectors of activity that make the greatest use of fossil fuels.
Alignment with The Paris Agreement objectives
In general, Vaudoise’s investment portfolios are aligned with various climate scenarios and the objectives of The Paris Agreement. The analysis indicates that its positioning is more favourable compared to other financial institutions that participated in the survey, showing that Vaudoise’s equity and corporate bond portfolios have little exposure to carbon-intensive technologies.
These results are all the more pleasing given that Vaudoise has only been formally applying ESG standards for the valuation of its investments since the end of 2019, when it signed up to the United Nations Principles for Responsible Investment (PRI).
The PACTA analysis examines the exposure of financial portfolios to carbon-intensive technologies, comparing them to other participants in the same sector. Considering that only a small percentage of its overall portfolio is invested in sectors with a high climate impact, the assessment notes that, compared to other Swiss insurers, Vaudoise’s corporate equities and bonds have a very low exposure to high-carbon activities.
Athough efforts must continue to be made to ensure that The Paris Agreement targets are met, Vaudoise says the results obtained following its participation in the PACTA survey are encouraging.
Sustainability at Vaudoise
As an insurer with mutualist roots and as an important player in the Swiss insurance market, Vaudoise has long been responsive to the issues of sustainability. The company has been committed to sustainable initiatives, both internally and externally, for many years.
These include, among others:
- Founding member of the Swiss Climate Foundation;
- Signatory of the CEOs 4 Climate initiative;
- Signatory of the UN Principles for Responsible Investment (UNPRI);
- Vaudoise has a sustainable investment strategy that aims to reduce the negative impact of its investments and increase their positive impact;
- Its properties are built and managed according to strict environmental standards in order to reduce greenhouse gas emissions from its property portfolio by 10% by 2025;
- It makes impact investments with the intention of generating, in addition to financial returns, a positive social and environmental impact, such as its investments in energy transition infrastructure funds.
Vaudoise is currently working on a strategic sustainability framework with the aim of publishing a first sustainability report.
Vaudoise Assurances is the only independent private insurance company with a decision-making centre in French-speaking Switzerland. It is one of the ten largest private insurers in the Swiss market. Founded in 1895, it has recognised expertise in all areas of insurance and pension provision. Faithful to its mutualist origins, it pays out part of its profits in the form of rebates.