Munich Re Group’s climate-related disclosure

Governance

The management of risks and opportunities arising from climate change is an integral component of Munich Re’s strategy. All material issues relating to climate are decided on Board of Management (BoM) level and dealt with on management level at various departments across Munich Re Group.

Strategy

Since 2008, Munich Re has a holistic climate strategy in place, which has been continuously evolved since then. In December 2020, we went one step further with the full integration of our new decarbonisation strategy into the Munich Re business strategy Ambition 2025. Our Group-wide objective is to contribute to achieving the Paris Agreement target of limiting global warming to well below 2°C.

Our decarbonisation strategy is an integral part of our overall climate strategy and circles around three core domains: assets, liabilities and our own emissions. As part of Munich Re’s Ambition 2025, we introduced a series of bold targets for our pathway towards further decarbonising our business until 2050, with 2025 marking the first important milestone on this journey.

Risk Management

Our climate change-related risk management is closely aligned with our approaches and measures described in the strategy section.  Munich Re Group adopts a strategic approach to climate change risks, which potentially affect the value drivers within the global risk and asset landscape covered by the Group.

Munich Re’s Group Chief Risk Officer (CRO) is responsible for organising and implementing an adequate risk management system at Group level. Risk management functions at the respective business units report to the CRO. This includes all climate change-related risks. In managing risks related to climate change, we draw on the expertise of our scientists, specialist underwriters, lawyers, economists, risk managers and actuaries in a company-wide risk management process. Climate change-related risks are monitored, evaluated and integrated into Munich Re’s risk management system and involve several methodical steps:

• Identifying and assessing physical climate risks
• Modelling and steering of physical risks
• Identifying, assessing and responding to transition risks and opportunities
• Scenario analysis
• Portfolio analysis (insurance and investments)

Metrics and targes 

Through our Ambition 2025, we have set ourselves specific milestone targets up until 2050, with 2025 marking a crucial first milestone. An important factor in our decarbonisation strategy is to distinguish between the concepts of carbon neutrality and net-zero. In order to genuinely decarbonise the world, we need to reduce our emissions as much as possible and remove the rest from the atmosphere. We believe our commitment to net-zero across the three pillars of assets, liabilities and our own operations will help promote new and sustainable ways of removing CO₂ from the atmosphere.

Assets:
By 2025, we will reduce absolute greenhouse gas emissions in our investment portfolio relating to listed equities, corporates and real estate by 25–29%, before achieving net-zero emissions by 2050. We have also set specific sector targets for thermal coal (reduction of 35% CO₂e) and oil and gas (25% CO₂e).

Liabilities:
On the liability side, over the next five years, we will reduce greenhouse gas emissions from coal and oil and gas underwriting by 35% and 5%, respectively (facultative, direct and primary (re)insurance business).

Own CO₂ emissions:
As part of our new climate ambition we will further reduce our emissions by 12% per employee by 2025 compared to 2019 and ultimately become net-zero across our operations by 2030.

Our commitment to protection against climate risks

For many years, Munich Re has played an active role in a range of national and international climate protection organisations, such as the United Nations Environmental Programme and the Global Climate Forum. We wish to contribute our expertise as a valuable partner for political decision-makers, organisations and other enterprises.