Zurich’s path to net-zero operations

Our approach to net-zero operations

Our priority is to reduce the amount of carbon dioxide-equivalent (CO2e) emissions in the atmosphere, as we move towards our target to reduce absolute emissions of our own operations¹ by 60 percent in 2025, by 70 percent in 2029² and finally to net-zero in 2030.

For our supply chain, our target is for 75 percent of our managed procurement spend³ to be with suppliers that have science-based targets⁴ to reduce emissions by 2025 and targets to reach net-zero⁵ by 2030.

A carbon dioxide-equivalent is used to measure and compare emissions from greenhouse gases based on how much they contribute to global warming. Metrics for CO2 equivalent show how much a particular gas would contribute to global warming if it were carbon dioxide.

We have already made significant progress in this respect and have a clear path to further reduction by, for example, increasing our usage of renewable electricity and electric vehicles, while also embracing hybrid working and travelling in a smarter way, for example by combining trips, taking less trips, using technology instead of in-person meetings requiring travel.

Even with deep and widespread cuts, we know that it will be impossible to reduce all emissions to zero in this timeframe. That’s why we will balance out our unavoidable residual emissions by funding projects that will remove carbon from the atmosphere for the long term. We will provide our funding by purchasing carbon removal certificates.

Our governance principles

We strive to lead by example, and this drives our approach to operational sustainability at Zurich Insurance Group (Zurich). To help accelerate reductions in emissions, enhance resilience to climate change and regenerate nature, we integrate sustainability considerations into our operational business processes.

Good governance principles are at the core of our approach to ensure that our own behavior reinforces our ambition to be recognized as one of the most responsible and impactful businesses in the world.

Incredibly important to our approach is our spirit of collaboration. Internally, with our suppliers and other external engagements, we strive to bring together ideas and people to learn from one another and develop new initiatives and programs to enhance our sustainability efforts.

Since 2014, Zurich has implemented internal guidelines based on external guidance as provided by the ISO14001 Environmental Management System. These guidelines align with the expectations expressed by our shareholders, investors, customers, employees and corporate peers, who expect Zurich to demonstrate best-practice in operational sustainability performance. Our approach to the management of sustainability risks and opportunities in Zurich’s operations is further explained in Zurich's approach to operational sustainability file.

Key sustainable operations programs

Overview of operational emissions targets and results

As anticipated, we continued to transition to the post pandemic world, hence emissions increased compared to 2022. This was mostly driven by increases to commuting emissions as workers spent more time in the office, and increases in business travel occurred. While we maintain our ambition to keep air travel emissions 70 percent below 2019 levels in the long run, prioritizing the needs of our customers and partners has resulted in a 66 percent reduction for air travel emissions in 2023 when compared to 2019 levels. We are watching developments in the sustainable aviation fuel (SAF) market to understand if, in the future, we can supplement minor shortfalls to our ambition with SAF purchases. We continue to make progress towards emissions reductions in our car fleet as we work towards our goal to fully electrify our car fleet by 2029, per our EV100 commitment.

Absolute carbon emissions coming from our own operations¹

Reporting methodology – key facts

• Zurich’s environmental reporting methodology follows the GRI Standard, which is based on the requirements of the Greenhouse Gas Protocol Corporate Accounting Standards. In line with the guidance provided by these standards, we comply with mandatory Scope 1 and Scope 2 emissions reporting, and include Scope 3 emissions where we have determined the sources to be material, where we have the ability to report meaningful data, and where we have the ability to influence emissions reductions.
• All data is reported in line with the calendar year Jan. 1st through Dec. 31st
• For facilities (electricity and heating) and commuting data, extrapolations are used where no actual data is available, to ensure 100% coverage. Extrapolations are based on regional, global or country average intensity factors for electricity, heating, or commuting behavior (respectively).
• For larger offices (greater than 250 headcounts), where waste data is not reported, an extrapolation is applied based on global average intensity factors.
• In line with our approach to continuous improvement, we have improved data quality as follows:
• Increased automation on the measurement of commutes to cover full year 2023
• Updated the factor for rental car estimations (where actual distance was not provided)
• Business travel by rail is now fully reported as actual vs previous reliance on estimations
• Increased quality controls on various data sets
• Applied emission factors were obtained mostly from GHG Protocol v.19.0 (4/2023), Defra v.12.0 (09/2023) and IEA v6.0 - (1/2024). Where available, more specific emission factors (e.g. national rail factors) were used and applied consistently by data type and source.
• Carbon offsets are not used to meet emissions reduction targets.

Verification of data

We are working to increase data transparency, quality and coverage of our environmental performance reporting. Since 2013, Zurich engages an external auditor to verify our published environmental data at limited assurance level. The above table on the 2023 results has received reasonable assurance. The corresponding assurance statement is available in the Sustainability report 2023. The full 2022 results also received reasonable assurance. The 2022 results and  assurance statement is available here:

¹ Cover-More, Farmers Group, Inc. and its subsidiaries, joint ventures and third party vendors are out of scope. We plan to include the aforementioned subsidiaries in the reporting for the financial year 2024. Data in the table shown as metric tons of CO2e.
² The 2025 and 2029 targets for our own operations are against a 2019 baseline.
³ Managed procurement spend means the spend of approximately USD 2 billion annually managed by Zurich's Procurement and Vendor Management function on goods and services that are required to enable Zurich to maintain and develop its operations.
⁴ We consider a supplier to have science-based targets when their emission reduction targets are approved by the SBTi, a similar scientifically accredited body or otherwise require a reduction of at least 42 percent in scope 1 and 2 emissions.
⁵ We consider a supplier to have net-zero targets when their net-zero target is approved by the SBTi, a similar scientifically accredited body or otherwise has a public target to neutralize any residual scope 1 and 2 emissions.
⁶ Where sourcing of renewable power is not technically feasible, we have sourced certificates from adjacent markets in Qatar, Bahrain and Ecuador and we are looking for the best solution in Bermuda. We procured renewable electricity to match our global office electricity demand and sourced 99% compliant with the RE100 technical criteria.
⁷ RE100 is a global leadership initiative bringing together influential businesses committed to 100 percent renewable electricity.
⁸ EV100 is a global leadership initiative bringing together influential businesses committed to accelerating the transition to electric vehicles.
⁹ Full-scale restaurants include where Zurich is the contracting party to the catering provider, a complete kitchen is onsite, and hot meals are prepared and served. This includes seven restaurants in five countries which service approximately 25% of our employees.
¹⁰ By 2029 non-plugin hybrids will also be eliminated, in line with our EV100 commitment.
¹¹ Customers may continue to opt in to paper-based communications, according to their preferences.
¹² Cover-More, Farmers Group, Inc. and its subsidiaries, joint ventures and third party vendors are out of scope of this commitment.
¹³ https://www.zurich.com/-/media/project/zurich/dotcom/sustainability/docs/Zurich-environmental-performance-data-2022.xlsx
¹⁴ Emissions related to facilities data (electricity, heating and waste) and employee commuting are impacted by a time lag and are therefore estimated. Final data will be published in Q2 2024 on our website.
¹⁵ DEFRA emissions factors for air travel have not been updated to reflect the 2023 revision considering DEFRAs application of 2021 load factors in their most recent calculations. This would have inflated air emissions by an estimated 20% and would not reflect an accurate view of Zurich’s travel activity.