The Swiss Re Group is one of the world's leading providers of reinsurance, insurance, and other forms of insurance-based risk transfer. It anticipates and manages risk, in particular from natural catastrophes. Since 2003, Swiss Re has been offsetting its own operational emissions through carbon credits, initially focusing on carbon avoidance and currently transitioning to carbon dioxide removal.

‍

No Small Task

In 2021, Swiss Re introduced an internal Carbon Steering Levy to incentivize reductions while funding removals. Initially set at $100 USD per tonne of CO₂, the levy is today (2024) at $134 USD, from where it will further increase every year until to $200 USD in 2030. The proceeds from this levy are earmarked to pay for the compensation of the company’s operational in-scope emissions through a mix of carbon avoidance and removal credits. The share of removals will increase by 10% every year, from 0% in 2020 (100% avoidance) to 100% removals in 2030 (0% avoidance).

‍

“The theory is undeniably elegant - but the reality can be a beast,” said Mischa Repmann, Senior Risk Manager for Swiss Re’s sustainability team, speaking at the Carbonfuture Carbon Removal Summit in London earlier this year. “Based on our actual emissions, each year we must secure the right amount of credits, with the right proportion of removals, and at the right average price point – given by the carbon steering levy available in that year. And this task is further complicated by a market that lacks liquidity and our ambition to do impactful sourcing via long-term offtake agreements.”

‍

In 2021, Swiss Re worked out and signed the world's first long-term Carbon Removal Purchase Agreement – worth 10 million USD over 10 years – with direct air capture pioneer Climeworks. Long-term purchases support the development of the carbon removal market by ensuring a steady future revenue stream for removal projects and their lenders.

Partnering Up to Navigate the Transition

In anticipation of rising demand for carbon removal credits from companies striving to meet their net-zero goals, Swiss Re turned to a partner in the young carbon removal market. Having previously collaborated with Carbonfuture on other purchases, the two teams devised a pioneering agreement with the supply partner Exomad Green, the world's largest producer of biochar. The deal ensures that Swiss Re has access to a stable supply of carbon removal credits, with lower transactional cost and built-in flexibility, and eventually at a price that is predictable and competitive.

‍

A crucial element of the deal was the emphasis on high standards for integrity, durability, and scalability. This is achieved through independent third-party monitoring, reporting, and verification via the Carbonfuture MRV+ system. This system meticulously tracks each batch of biochar from production to application, providing the essential data needed for third-party verification and certification.

‍

Ultimately, it is difficult enough to navigate the net-zero transition. Luckily, there are maps and fellow travelers. Through its partnership with Carbonfuture, Swiss Re secures a reliable and cost-effective supply of carbon removal credits, supported by a digital MRV that ensures confidence in the quality of these credits for Swiss Re and its stakeholders.