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Not if, but how

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Corporate responsibility in investment
© mauritius images / Masterfile
Because our business model as an insurer has a long-term focus, sustainability criteria in investment play a key, strategic role. Since as an insurance company, we must invest our clients’ money sensibly and profitably, we are subject to strict security and return requirements. For our investments, just as with our insurance business, we regard it as essential to consider ESG aspects and to offer responsible products and services.

Sustainable Management of our Munich Re investments is based on three pillars

1.
Systematic integration of ESG criteria
2.
Investment focus topics (for example renewable energies)
3.
Defined exclusion criteria
The Principles for Responsible Investment  (PRI), of which Munich Re was a founding member, provide the fundamental framework for Munich Re’s sustainable investment approach. The PRI aim to improve understanding of the environmental, social and corporate governance implications of investments and to support PRI signatories in integrating these issues into their investment decisions. Munich Re not only reports to PRI, but also engages it in fruitful dialogue to further develop its own ESG strategy in line with the latest developments. To further strengthen Munich Re’s commitment to this cause, the Group’s two asset managers, MEAG and Munich Re Investment Partners, also became PRI signatories in 2021. On the basis of the PRI, we have established a binding Group-wide Responsible Investment Guideline (RIG), which covers all PRI and ESG requirements that concern the Group’s investment management, including binding exclusion criteria for investments.

ESG criteria anchored in the investment process

It is Munich Re’s conviction that integrating ESG criteria into investment decisions contributes to better, more holistic risk management of the assets we own. Munich Re is  convinced that ESG integration leads to higher risk-adjusted returns over a market cycle. Furthermore, Munich Re combines various approaches of ESG integration across our investment value chain, from strategic asset allocation through to asset management. This helps identify risks and opportunities beyond standard financial analysis. An overview of the individual investment segments and their focus on sustainability you will find in our Sustainability Report.

Our investments: Focus on renewable energies

 

In the spirit of creating shared value, Munich Re uses economically sound investment opportunities to create a positive impact. ESG-focus investments contribute positively to our ESG strategy. Currently, these include renewable energy investments, certified real estate investments, forests with certified management and green bonds, all of which are linked to environmental aspects. In the medium term, we aim to extend the range of these ESG-focus investments to accord with regulatory developments, specifically with regard to the classification of investments according to the EU taxonomy.

Floating solar panels or solar cell platform on the lake
© Tomwang112 / iStock / Getty Images Plus
Floating solar panels on the lake
2.5
million MWh green electricity generated from our investments
485,000
around households supplied with green electricity
700,000
tonnes of CO2 avoided

Munich Re´s issued green bonds

In 2020, as the first German insurer, Munich Re issued a green bond (volume of €1.25bn). Munich Re issued a second green bond in 2021 with a volume of €1bn to further strengthen our commitment to creating positive impact. As part of the bond issuance, we committed ourselves to investing the volume issued in sustainable projects in accordance with the Green Bond Framework. When selecting the projects, we were guided by the UN Sustainable Development Goals. We have specified a time horizon of 36 months in this regard and will publish information about the investments made in an allocation report on our homepage. We intend to invest the volume issued in projects that are diversified geographically and across the alternative asset classes.