Our year in review

As the need to take action on climate becomes more urgent, Zurich is helping to scale up novel, nature-based solutions to remove and store carbon from the atmosphere.

In Puerto Rico, a derelict sugar cane factory has become the site of a pioneering approach to carbon removal.

“We’re able to create a new economy for the west side of Puerto Rico.”

Edwin Rodriguez

director of operations for Bio Restorative Ideas in Puerto Rico.

Here, Bio Restorative Ideas (BRi) turns bamboo into biochar, a charcoal-like material that sequesters carbon, effectively removing it from the atmosphere.

This is achieved through a process known as pyrolysis, which takes place when organic material is heated with no oxygen—cooking, rather than burning it.

BRi hopes to transform about 13,000 metric tons of this waste and invasive bamboo into 3,000 metric tons of high-quality biochar while creating about 15 to 20 local jobs. Zurich pre-purchased carbon removals to provide advance funding to the project to help it get up and running. Production of biochar began in February 2023. The carbon removals will be certified by Puro.earth..

“Zurich is supporting a company that is a pioneer,” said Edwin Rodriguez, director of operations for BRi in Puerto Rico. “We’re not just picking up the bamboo and converting it. We’re also contributing to a new wave of companies looking for ways to tackle global warming.”

In addition to preventing the carbon inside organic material from turning into carbon dioxide, biochar has multiple environmental and commercial uses, including enriching soils, city landscaping and using it in landfills as a filter. Biochar can remain in soil for centuries and even thousands of years, making it an ideal technology for scalable carbon removal.

While bamboo helps protect riverbanks from erosion due to its dense roots, the ancient grass also causes a number of problems on Puerto Rico. It has little economic value, it grows very fast and during storms can end up blocking rivers, bridges and roads. BRi uses this waste bamboo, which would otherwise be burnt, emitting CO2, or fermented, emitting methane, as a feedstock for the pyrolysis process.

The project aims to have social benefits, too, by helping create high-quality jobs and supporting the transition to new economies in an area that was once the epicenter of economic activity on the island. This activity ceased with the closure of the sugar cane plant more than 20 years ago.

“We’re able to create a new economy for the west side of Puerto Rico,” says Edwin.

Pops Diabetes Care combines a smartphone blood sugar monitor with a virtual health coach app to help simplify the way people with diabetes manage their condition. The U.S.-based startup was a runner up in the Zurich Innovation Championship in 2020 and has been working with Zurich ever since.

Lonny Stormo thinks about his diabetes no less than 50 times a day.

“This is the future of healthcare and it’s what drove us from the very beginning.”

Lonny Stormo

CEO Pops Diabetes Care

“I'm always thinking about my diabetes,” says Stormo, the CEO and founder of startup Pops Diabetes Care, which is based in Minneapolis. “I can't forget about diabetes when I'm choosing what to eat and even during a conversation like this, I'm thinking about whether my blood sugar will fall.”

Stormo is one of an increasing number of diabetes sufferers—some 422 million worldwide, according to figures from the World Health Organization. Most people with diabetes, Stormo says, manage their condition themselves on a day-to-day basis, with little input from their doctor.

“During a year, I spend about 30 minutes with my doctor. After that, it's totally up to me whether I'm going to manage this or not,” he says. “Too many people think it's too difficult to manage their diabetes. So they just don't do it. They just live with it and get by.”

This realization led to the creation of Pops Diabetes Care, which pairs a blood sugar sensor with a smartphone app. It wirelessly records blood sugar results making it one of the most discreet and easy-to-use diabetes self-management tools available.

Following its success in the Zurich Innovation Championship 2020, Pops joined forces with Zurich Australia in February 2022 to launch an Australian pilot for certain Zurich customers.

Participants of the pilot can access trends in their glucose levels, after regular testing. They can also use Mina, a virtual health coach, which encourages people to better manage their diabetes by making them more knowledgeable about the condition. For example, Mina prompts users to check their glucose on a regular basis or make sure they have glucose handy in case their blood sugar falls.

The COVID-19 pandemic—and the rise of telemedicine—helped accelerate the shift to healthcare that focuses on the consumer and their needs, Stormo says.

“Now you can start to check for viruses at home, for ear infections and screen for heart arrhythmias at home, all these things,” Stormo says. “The next phase of that is what we're doing, which is essentially in-home health care: technology consumers can buy and bring into their homes.”

“This is the future of healthcare and it’s what drove us from the very beginning.”

Ports are vulnerable to current and future climate change-related risks. Maersk wants to ensure its port terminals are future-proof and has brought in expertise from Zurich Resilience Solutions to help.

Ports are among the most exposed sites in the world to climate risks. Typically located along open coasts or in low-lying estuaries and deltas, ports are vulnerable to windstorms, flooding and storm surge.

Their operations can be interrupted by fog and snow, while heatwaves can restrict working conditions. But ports will also be on the frontline when one of climate change’s most worrying long-term impacts – sea level rise – begins to engulf the world.

"The average cost of physical damage and business interruption due to climate change hazards is expected to increase by 130 percent by 2050, compared to a 2020 baseline.”

Lars Henneberg

VP, Head of Risk Management, A.P. Moller-Maersk

“In the past decade, we have seen coastal flooding at our terminal in Port Elizabeth, New Jersey; flooding at our Salalah terminal in Oman; a cyclone hit our Pipavav terminal in India; and regular exposure to tropical windstorms to our terminals in Miami, Florida, and Mobile, Alabama,” says Lars Henneberg, VP, Head of Risk Management at A.P. Moller-Maersk (‘Maersk’), one of the world’s largest container-shipping companies.

Extreme weather can cause immense physical damage to port equipment, like cranes, and to the supporting infrastructure, such as electrical substations. Heatwaves can even melt the tarmac underneath the containers. Not only does this damage cause physical losses, but also business interruption costs as the terminal may not be able to operate at maximum capacity or could even be forced to close.

The threat from climate change

It’s no wonder that Maersk – with more than 67 port terminals, 300 inland facilities and 600 container ships – identified climate change, both physical and transition risks, as one of the biggest threats to its business in a recent enterprise risk management (ERM) exercise.

The ERM process was followed up by a study that analyzed 107 of Maersk’s most important land-based assets (port terminals, inland warehouses and data centers). It was designed to establish how and where Maersk’s operations and business were most exposed to climate risks over the next 30 years. “The study concluded that the average cost of physical damage and business interruption due to climate change hazards is expected to increase by 130 percent by 2050, compared to a 2020 baseline,” says Henneberg.

For the next step, Zurich’s global risk consulting unit – Zurich Resilience Solutions (ZRS) – was engaged by Maersk. The ZRS team develops data-driven and science-based insights to develop and implement risk management strategies. Its services cover a range of risk areas, from supply chain and cyber risks to sustainability and climate change.

Highly specialized risk engineers from one of ZRS’s specialist units, Climate Resilience, were tasked to undertake on-site climate assessments at five critical port terminals in Rotterdam, Netherlands; Port Said on the Suez Canal in Egypt; Aqaba, Jordan; Port Elizabeth, New Jersey; and Los Angeles, California. These site visits are supported by a team of Climate Resilience climate data experts who use the latest climate science, data and modeling techniques to develop mitigation solutions tailored to each port.

Maersk selected ZRS, in part, due to its existing strong relationship with the Zurich Insurance Group (‘Zurich’). Zurich’s digital expertise in marine insurance supports Maersk’s online cargo insurance solution called Maersk Cargo Insurance. Zurich also provides risk transfer and fronting services to Maersk’s own captive insurance company, Maersk Insurance, and has been providing risk engineering surveys on property and business interruption exposures since early 2021.

Peter Gede, Maersk’s Claims & Loss Prevention Manager, says it’s vital that Maersk has an overview of the current risk landscape, especially as it retains risks through its captive. “We need to understand if the threats we face meet our risk appetite. Then we can either mitigate the risks or transfer it out of the captive and find separate insurance cover.”

But as well as highlighting the ports’ vulnerabilities to climate risks, Maersk also wants ZRS to provide actionable recommendations to mitigate these risks and improve climate resilience. And Henneberg believes ZRS has the right skillset to provide these insights.

“ZRS has the necessary scientific and technical risk engineering capabilities, combined with risk assessment and impact analysis expertise. This will ensure we have recommendations that are both practical and operational and will help us mitigate vulnerabilities and increase climate resiliency on our port terminals.”

ZRS has already completed on-site climate assessments in Rotterdam, Aqaba and Port Said. There will be follow-up workshops at each port terminal to discuss the vulnerabilities and recommended mitigation actions that will feed into each terminal’s maintenance schedules and potential investments into upgrading physical resilience measures.

Gede is also impressed with how ZRS’s climate assessments will examine the resilience of the surrounding region. “Our business is no longer focused on port-to-port transportation, instead we provide end-to-end logistics solutions to our customers,” says Gede.

“Our port terminals rely on a network of roads, rail and rivers to transport our cargo to inland destinations. It means we cannot look at the climate resilience of our port terminals in isolation, we need to have a big picture view of the risk. And ZRS provides this.”

Hanno Mijer, Global Head of Zurich Resilience Solutions, says that close collaboration with Maersk has enabled them to develop a deep understanding of its business and risk exposures.

“Our aim, as with all customers, is to couple our understanding of Maersk’s value chain with our end-to-end climate change analysis services. This will help strengthen Maersk’s climate resilience by providing actionable insights and recommendations that will protect its business today and into the future.

“There’s a growing realization that climate change is happening now. As a result, we have seen demand for climate resilience services grow exponentially in recent years. More businesses urgently want to define and deploy effective climate adaptation and mitigation strategies to protect them in both the short- and long-term. That requires specialist knowhow and this is where ZRS provide real value to our customers.”

What gets measured gets managed. Applying that thinking to the planet is the focus of Swiss-based Restor.

The information Restor provides is helping organizations, including Zurich, to assess the impact of efforts to protect fragile ecosystems. By collecting and sharing detailed information on its platform about individual restoration projects – including forests, wetlands and agriculture – Restor is helping to restore, preserve and maintain global ecosystems and the biodiversity they support.

“At Restor, we want to provide insights that give projects like the Zurich Forest an opportunity to see if they are meeting their goals. Restor also allows them to increase visibility on a global scale and share the positive impact they achieve.”

Clara Rowe

CEO, Restor

Zurich has looked to Restor for insights as part of its efforts to restore part of Brazil’s threatened Atlantic Forest. Working with Instituto Terra, a Brazilian non-profit founded by award-winning Brazilian photographer Sebastião Salgado and his wife Lélia, Zurich is helping bring life back to a 700-hectare portion of the forest – called the Zurich Forest project. As part of its support, Zurich provided a grant to enable Instituto Terra to plant one million seedlings over eight years through to 2027. That’s in addition to more than 2.4 million seedlings that the non-profit has already planted in the reserve. 

But it goes beyond trees. A forest brought back to its natural state – fully self-sustaining and biodiverse – is a haven not only for a great number of trees; it also promotes wildlife and helps to protect vital water resources. The Zurich Forest project will restore biodiversity, protect soil and safeguard water sources. It will help regenerate a small but vital piece of the patchwork biome that makes up what was once one of the world’s largest contiguous forest habitats, stretching from Brazil’s eastern-most tip in the north all the way into Paraguay and Argentina in the south.

Restor’s technology helps accelerate efforts to protect and restore natural environments. At its heart, is a data-driven web platform that allows users to select specific regions – down to a resolution of 30 centimeters – and zoom in to assess their restoration and conservation impact and potential. 

Owned by the Swiss charitable organization Restor Foundation, Restor was established in 2021. Its founders describe it as a spin-off from a project set up by Thomas Crowther, a British professor of ecology at ETH Zurich, one of Switzerland’s leading technical universities. Originally developed in collaboration with Google, a wholly owned subsidiary of Alphabet Inc., Restor uses the Google Earth Engine to allow users to spot changes, trends and quantify information about what is happening on the Earth’s surface.  

Restor uses data from Google Earth Engine, as well as numerous public data and mapping services, to give users vital information on specific localities. Data may include soil pH, vegetation change, rainfall amounts, carbon sequestration potential and even details about which species might be present. This data can help restoration projects have a positive and lasting impact.

Restor is an official partner of the UN Decade on Ecosystem Restoration. Since its launch in June 2021, more than 520 organizations in 110 countries have joined Restor. It is now home to 120,000 restoration sites, according to the organization.

“If we want to inspire others to take action, we need to be credible in our own engagement,” says Heike Mittmann, Group Sustainability Communications Director at Zurich. “For this, transparency is key,” she says.

It’s hard to imagine anything more disruptive than the internet. It has, after all, changed almost everything, from the way we communicate to how we work. But for John Podesta, a former White House chief of staff and now advisor to US President Biden on clean energy, the push to get to net-zero emissions will have an even more radical effect on our lives and our economy.

“I lived through the earliest part of my career seeing the power of the internet and what it did to communications and information technologies. This is even more profound than that,” he said at the Bloomberg Green Summit in New York. “We have to get to net-zero, and that’s a transformation of the global economy on a size and scale that’s never occurred in human history.”

If that sounds daunting, that’s because it is. Take the example of clean energy. As Podesta pointed out, “clean power is already cheaper than fossil power.” And yet, as was reported in the 2023 Global Risks Report, developed by the World Economic Forum in collaboration with Zurich and Marsh McLennan, geopolitical tensions and economic pressures have seen the EU spend around €50 billion on fossil fuel infrastructure and supplies.

Geopolitical strife and economic uncertainty aside, there are many more roadblocks on the path to net-zero emissions. According to the Financial Times, business executives are not convinced the workforce is equipped with the skills needed to put in place the transition, and the returns on investment for green projects are not yet where the markets would like them to be.

Initiatives such as the US Inflation Reduction Act — which provides funding and incentives to accelerate the clean energy transition, and which Podesta is tasked with implementing — provide one example of how governments can help remove these roadblocks. But as Podesta says, even throwing billions of dollars at the problem does not take away from the complex nature of the challenge. “I thought it’d be easy to give away $370 billion, but it turns out there’s a lot to it to try to get right,” he joked, adding that the most effective approach will be to “go sector by sector.”

One sector that has already seen huge transformations is the transport industry, which in 2021 accounted for 28% of greenhouse gas emissions in the US.

According to Brazilian motorsports racing driver Lucas di Grassi, who was also in attendance at the Bloomberg Green Summit, “back in 2012, nobody was really talking about electric cars.” It was around that time that di Grassi became the official test driver for Formula E, a motorsport championship for electric cars. The idea, he explained, was “to accelerate the development of technologies that you’ll see in commercial vehicles in the future.” A decade later, global sales of EVs hit 6.6 million, almost doubling from the previous year.

Of course, government subsidies have helped boost those sales. In the US, for example, provided certain conditions are met, consumers buying electric vehicles can receive a tax credit of $7,500. Government regulation will also have a role to play in the gradual phasing out of fossil-fuel-powered vehicles. Indeed, many countries — the UK and Denmark, to name just two — have already outlined their plans to ban sales of new cars with internal combustion engines by 2030.

That goal might sound audacious, especially given the slow pace of progress when it comes to developing the infrastructure needed to support the mass uptake of electric vehicles. But di Grassi thinks the technological developments he and his teammates have seen on the racing tracks will soon be available on the consumer market, which could help smooth the transition and offer new opportunities for businesses. “There are many different technologies that we are racing with now that others will see on the road in the next few years,” he explained. “Our batteries have a charge rate of 600 kW.” As a point of reference, today, the fastest commercial chargers have a rate of 350 kW, and home chargers have a rate of 3.6 kW.

For Podesta, these types of innovations will ultimately be good for both the economy and the environment. “The push for investment and innovation is happening across the board,” he noted. “That creates growth, that creates momentum, that creates sustainability.”

Zurich Insurance Group was a presenting sponsor of the Bloomberg Green Summit for the third consecutive year. During the event, Zurich unveiled an inspiring video, "Listen to the Zurich Forest,” which tells the story of the Zurich Forest Project in Brazil, a small but tangible example of how Zurich is taking action to address climate change.

Watch the full episode for more insights, which was first aired on May 25, 2023, on Bloomberg.com.