If Insurance’s near-term climate targets approved by SBTi

– We want our targets to have as much impact as possible. By setting science-based targets, and including voluntary reduction measures for our claims operations, we hope to set an example that other insurance companies will follow, says CEO Morten Thorsrud.

If Insurance’s near-term science-based emissions reduction targets have been approved by Science Based Targets initiative (SBTi). If now joins more than 4,000 companies worldwide that have had their climate targets approved by the renowned, international sustainability organisation.

Morten Thorsrud photo.

Including voluntary targets for claims operations

If Insurance CEO Morten Thorsrud has been awaiting the approval with anticipation.

– Climate change is an issue of global importance, which requires urgent attention from us all. We want to do our part and support the transformation by setting ambitious and science-based targets, which are in line with the Paris Agreement. The SBTi validation is an important milestone on this journey, says If’s CEO Morten Thorsrud.

If is the largest insurance company in the Nordics, with operations in all Nordic and Baltic countries. The company sent in its commitment to set near-term science-based targets to the SBTi in 2021.

If’s investment portfolio of about SEK 120 billion represents the majority of If’s total greenhouse gas emissions, and as a financial institution, If is required to set targets for the company’s investments. If has chosen to take its commitment one step further and also set targets for its claims operations, although there is no requirement to do so. Claims represent a substantial part of If’s total emissions, as If purchases goods and services worth more than SEK 11 billion every year within the motor and property segments.

– It is vital that we do everything we can to reduce greenhouse gas emissions. We can make an important difference by requiring and supporting our claims contractors to work ambitiously on sustainability – for example, by reducing material use and by repairing and reusing instead of using new parts. That’s why we want to include claims operations in our target setting, says CEO Morten Thorsrud.

Article continues below the graphics

SBTi guidance on financial sector science-based targets

Financial institutions (FIs) must set targets that cover:

Scope 1: Direct emissions from owned or controlled sources, such as company cars.

Scope 2: Indirect emissions from the generation of purchased electricity, heating, steam and cooling, such as the heating and cooling of offices.

Scope 3: Investment and lending activities.

Targets set by If: Reduce emissions by 42,5% by 2023 when it comes to company cars and using energy. Also indirect emissions. If commits that 30% of suppliers by spend covering purchased goods will have science based targets by 2028.
Targets set by If.

These are the targets set by If:

Scope 1: Direct energy

Reducing emissions by 48% by 2030

If’s emissions in this scope come from company cars. If will reduce emissions from 132 tonnes CO2e in base year 2020 to 69 tonnes by 2030 by, for example, replacing petrol and diesel cars with EVs.

Scope 2: Indirect energy

Reducing emissions by 42% by 2030

Emissions from the use of electricity, heating and cooling in If’s offices will be reduced from 1,488 tonnes CO2e in base year 2020 to 863 tonnes CO2e by 2030. This will happen by, for example, switching to green district heating in our Helsinki office and using renewable electricity in our Baltic offices.

The electricity we purchase for our major offices in the Nordics already comes from renewable sources.

Scope 3: Other indirect emissions

Scope 3 covers 15 emission categories. For the financial sector, investment is the only mandatory category. If has voluntarily added the reduction of emissions from purchased goods and services.

Investments accounted for 433,000 tonnes of CO2e of If’s emissions in 2020*. If’s portfolio targets cover 85% of its total investment and lending as of 2020**. If uses Temperature Rating for the setting of targets related to listed equity, corporate bonds, fund and ETFs, for example:

  • If commits to align its scope 1 + 2 portfolio temperature score by invested value within the listed equity, corporate bond, fund and ETFs portfolio from 2.52°C in 2020 to 2.04°C by 2027.

Purchased goods and services from claims operations caused emissions of almost 90,000 tonnes of CO2e in 2020. Since 2020, all suppliers in claims operations and group services are required to comply with If’s Supplier Code of Conduct. If has now, on a voluntary basis, also set supplier engagement targets for purchased goods and services to reduce emissions from claims operations:

  • If commits that 30% of its suppliers by spend covering purchased goods and services will have science-based targets by 2028.

– Our claims operation is the core of our business. We buy materials and services for more than SEK 11 billion per year and handle more than a million claims within the motor and property segments. This is where we indirectly have a substantial part of our emissions, and obviously we can make an impact by encouraging our suppliers to set ambitious climate targets, says Thorsrud.

Philip Thörn photo.

If’s Head of Sustainability, Philip Thörn, agrees.

– By actively requesting innovative solutions, resource efficiency, transparency and responsibility from our suppliers, we aim to minimise our negative impact and stimulate sustainable production and consumption.

Strict requirements, in combination with close cooperation with our suppliers and partners, enable us to develop our business while also contributing to more sustainable development, explains Thörn.

He adds:

– We believe that the insurance industry should be more focused on the climate impact of this part of the business, and we are happy to go beyond the demands of SBTi.

If already repairs and reuses almost 3,500 tonnes of plastic and metal within vehicle repairs every year.

– We want our reduction to have as much impact as possible. We believe that the most ambitious way to ensure this is to join the SBTi and set science-based targets. As the leading insurance company in the Nordics, we hope to set an example that others will follow, says Thorsrud.

If’s next step will be to update policies and frameworks to support the reduction of greenhouse gas (GHG) emissions.

About Science Based Targets initiative (SBTi)

The Science Based Targets initiative (SBTi)is a partnership between United Nations Global Compact, World Resources Institute, World Wide Fund for Nature (WWF) and CDP.

The initiative drives ambitious climate action in the private sector by enabling organisations to set sector-specific science-based targets for the reduction of emissions in a measurable and standardised way.

Targets are ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement.

A full list of If’s investment targets is available at: Companies taking action – Science Based Targets.

Fact box

* Financed emissions in Scope 1 and 2 for equity and fixed income investments.

** If uses the Temperature Rating approach for corporate loans (except commercial real estate), listed equity, corporate bonds, funds and ETFs and the Sectoral Decarbonisation Approach (SDA) for corporate loans (commercial real estate).