Swiss Re outsources part of the investment portfolio management to external managers. Before external managers are appointed, we perform thorough due diligence, which includes confirming their compliance with our responsible investment approach. This includes the managers' governance approach, the assessment of dedicated resources and policies, as well as ESG integration in their investment decisions. The managers are also requested to provide insights on their approach to engagement and voting, as well as monitoring and reporting.
After being mandated, the managers' individual performance is measured against pre-defined ESG criteria.
The contractual framework for appointing external managers highlights Swiss Re's commitment to responsible investing, and the external managers' responsibility to take ESG considerations into account in their investment process. We define our investment guidelines integrating ESG considerations through pre-defined ESG criteria, the Sustainable Business Risk Framework-based exclusion list, the coal and oil sand exclusions and/or exclusions based on reputational risk concerns, which external managers are required to apply. Monitoring of these ESG risk exposures is an integral part of the regular performance reviews.
In line with Swiss Re's efforts, external managers are encouraged to continually enhance their commitment to responsible investing and to report to Swiss Re on the implementation and impact on Swiss Re's outsourced investment portfolio. Swiss Re requires regular reporting on the external managers' efforts made and monitors their progress.
Swiss Re Asset Management´s ESG Advisory Board reviews the ESG due diligence framework to assess external managers on a regular basis. Any gaps between the investment managers' approach and the Swiss Re Responsible Investing Policy or the Swiss Re Asset Management Voting Framework guide improvement activities.