Zurich teams up with South Pole to support businesses with climate adaptation and mitigation

Surprising and disappointing news for some that Zurich is the second major Insurer who has withdrawn from the Net Zero Alliance, just yesterday becoming the second founding member to quit the climate group in less than a week, Munich being the other one.

Part of the Glasgow Financial Alliance for Net Zero (GFANZ) umbrella group of sectors pushing to decarbonise, NZIA members have faced growing pressure from campaigners to move faster in cutting emissions linked to their underwriting.

Zurich, one of Europe's biggest insurers, said after establishing a standardised methodology for tracking and disclosing emissions, it wanted "to focus our resources to support our customers with their transition".

The move by Zurich follows an announcement on Friday by Munich Re (MUVGn.DE) to leave the group because of antitrust concerns associated with alliances among companies to tackle climate change.

Media release, Zurich, January 25, 2023, 3 min read

Zurich Resilience Solutions (ZRS), the commercial risk advisory and services unit of Zurich Insurance Group (Zurich), and South Pole, a leading climate solutions provider and carbon project developer, are joining forces to provide a new climate change related offering to companies.

The joint offering will help businesses tackle both sides of the climate challenge at the same time, with solutions that help them to define and execute their short- and long-term climate resilience objectives as well as their net-zero goals. It will focus on measuring physical climate risk and emissions, helping to establish a strategy to reduce each, and oversee the implementation of solutions that meet a company’s goals and local regulatory and sustainability reporting requirements. The offering will initially be available in the U.S., Germany and Switzerland.

Hanno Mijer, Global Head of Zurich Resilience Solutions, said: “Defining and deploying effective climate adaptation and mitigation strategies requires special knowhow and can be extremely complex and time-consuming, even more so for multinationals. Demand for climate resilience services has grown exponentially in recent years. Collaborating with South Pole will allow us to address climate-related risks holistically by supporting customers on their net-zero journey as well as resilience.”

“Companies that fail to demonstrate their progress in building resilience and reducing emissions will likely pay the price both reputationally and financially,” said Renat Heuberger, CEO, South Pole. “But knowing where to start can be difficult. We are pleased to combine South Pole’s best-in-class climate advisory with Zurich Resilience Solutions’ expertise in resilience to steer corporate leaders toward effective mitigation and adaptation efforts – both for commercial success and for climate protection.”

The likelihood of missing the goal of limiting the rise in global temperatures to 1.5-degrees Celsius versus pre-industrial levels is growing by the day. To successfully transition to net-zero and mitigate the environmental impacts, companies need to intensify their efforts to collectively reduce emissions. In parallel, companies have to prepare and adapt to the consequences of global warming and consider the current and future impacts of climate change on their business when taking strategic decisions. According to the Climate Disclosure Project (CDP), the financial benefits of climate action are at least 15 times higher than the cost of risks.

Companies increasingly understand that taking climate action is not only critical to managing their operational risks. There is also a growing awareness that many of their stakeholders expect companies to transparently demonstrate how they are actively reducing their environmental impact and building resilience along their value chain, and, more importantly, to regularly report on the effectiveness of these measures.

The climate journey is a challenging one. However, through the new joint-offering, Zurich and South Pole are well positioned to help companies take concrete steps and make climate mitigation and adaptation a priority to risk-proof their current and future operations, ensure compliance with evolving regulatory requirements, and create long-term value for their shareholders.