Why would Swiss Re back from the SBTi validation?
- ayshasathar101
- Sep 12, 2025
- 4 min read
What actually happened?
Zurich-based insurance and reinsurance company Swiss Re announced on September 3, 2025 that it will no longer pursue Science Based Targets initiative(SBTi) validation for its climate targets, although the firm stated that it's sustainability strategy remains unchanged including its goal to reach net zero greenhouse gas (GHG) emissions by 2050.
What could be the possible reasons behind the move?
Swiss Re has not provided a specific reason for its decision to pursue its sustainability goals independently of SBTi validation. But the possibility of certain reasons can be taken in consideration.
1. Opposition to ESG initiatives: This recent decision comes in the wake of a campaign launched by U.S. politicians opposed to environmental, social, and governance (ESG) initiatives. The campaign warns the Science Based Targets initiative and its financial sector participants about potential violations of antitrust and consumer protection laws related to their net zero commitments, particularly following the release of SBTi’s Financial Institutions Net-Zero (FINZ) Standard.
2. Evolving SBTi Requirements: The FINZ Standard enables financial firms to set net zero-aligned targets across various activities, including lending, investing, insurance, and capital markets. It requires financial institutions to publish a "fossil fuel transparency policy." according to a report by BUSINESS QUARTER
Fossil fuel transparency policy: This policy mandates the immediate cessation of project finance linked to fossil fuel expansion and the phasing out of general finance to oil and gas companies involved in expansion by 2030, to transition portfolio energy activities to net zero by 2050. (by a Business Quarter article)
Now you might be wondering why would this be applicable to Swiss Re, Isn't it Zurich-based? - Absolutely, but It is also a global reinsurer with U.S. operations and clients and therefore is subjected to U.S. regulations and the legal risks posed by collaborative action on fossil fuel exclusion. So this could impact the company even if its headquarters are outside the U.S.
The Independent route towards NET-ZERO.
NOTE: Despite leaving Science Based Targets initiative (SBTi) validation, Swiss Re’s sustainability strategy and net zero targets remain unchanged. The company continues to advance internal climate targets and client net-zero engagement and by tracking progress independently!
In its statement announcing the change, Swiss Re said:
“With its Climate Transition Plan, Swiss Re has set interim milestones on the path to net-zero. Our focus now is on further implementing our sustainability strategy and supporting our clients in their net-zero journey through this highly dynamic environment.”
Earlier this year, Swiss Re issued a Climate Transition Plan, reiterating its 2050 net zero underwriting goal and interim targets, including commitments to ensure that by 2025, 50% of its gross written premiums from oil and gas producers, and by 2030, 100% will come from companies committed to net zero by 2050.
What does this move highlight?
It highlights the growing tension within the global finance sector over how to navigate net zero commitments with the rising political scrutiny. The insurance industry, in particular, faces unique challenges in aligning underwriting activities with decarbonisation goals while avoiding legal or reputational risks.
~ What remains to be seen is whether this approach will maintain credibility with investors, regulators, and the broader public in an increasingly transparent ESG arena.
~Will more companies retreat from third-party validation as political and legal pressures grow?
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Writer's Information
Researcher and Writer: Aysha Abdul Sathar
Hey, I'm Aysha and I'm working as a Sustainability Research Intern, and is pursuing my Bachelor's in Economics. I'm also exploring sustainability and the practices and learning just like you guys, cheers to us!
Reviewer: Pratiksha More
Meet Pratiksha, she is a dedicated sustainability consultant with 5+ years of expertise in ESG reporting, GHG accounting, and decarbonization strategies. She has worked with organizations like Deloitte, Oren, Knite Freight, Bureau Veritas, and Sustainext helping businesses develop ESG strategies and improve sustainability reporting.
Basically she wears all the hats in the organisation to make each event successful!
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