Sustainable investment

Taking account of ecological and social factors for investments does not necessarily mean accepting a lower return.

Insurers such as Munich Re have large amounts to invest. They need to invest the premiums they collect in such a way that sufficient funds are available to cover major claims. In addition to the traditional investment criteria of return, safety and liquidity, the responsibility factor has grown in significance in the last few years. This is not least due to the fact that the negative effects of climate change can have a major impact on underwriting.

Munich Re takes this responsibility very seriously. As early as 2002, we decided that our investments in shares and corporate bonds had to meet certain sustainability requirements and these were extended to government bonds at the end of 2005. The target is for 80% of investments in shares, corporate bonds and government bonds to satisfy our sustainability criteria. We apply generally recognised criteria such as the Dow Jones Sustainability Index and the sustainability ratings issued by the respected oekom research agency. We have already exceeded this target in the Group.

On 27 April 2006, we were the first German company to sign the UN Principles for Responsible Investment (PRI). The six principles are backed up by 35 recommendations for institutional investors to incorporate environmental, social and corporate-governance criteria into their investment decisions.

Behind the principles was the view that, whilst the global economy is driven by money, investment decisions take insufficient account of the need for sustainable development. Munich Re is convinced that a modern investment strategy based on the UN principles will in the long term have a beneficial effect on risk and return.

Munich Re also, of course, considers sustainability when taking decisions relating to its long-term shareholdings and property investments.