Making an impact by funding solutions

responsible investment impact

Impact investing is our way of investing in good causes.

As a responsible investor, we use capital markets to search for – and fund – solutions to many of the pressing social or environmental issues of our time.

Zurich is committed to making up to USD 5 billion in impact investments. Achieving this level, will, we believe, avoid 5 million tons of CO2-equivalent emissions per year, and separately, make a positive contribution to the lives and livelihoods of 5 million people.

Zurich evaluates impact investments within the context of specific asset classes and creates dedicated strategies for impact investments within those classes. While continuing to make systematic use of environmental, social and governance (ESG) data in investment decision-making, we will look at a variety of ways to grow our impact investment portfolios around the world. We will focus on the following asset classes:

  1. Green bonds: The green bond market has shown impressive growth over the past several years. We expect our green bond portfolios to continue growing beyond the USD 2 billion mark – the milestone we reached in August 2017. As of December 2019, Zurich had invested USD 3.1 billion in green bonds.
  2. Social/sustainability bonds: With the introduction of the Social Bond Principles (SBP) and the Sustainability Bond Guidelines (SBG), we are seeing increased opportunities in the social and sustainability bond space. As of December 2019, Zurich had invested USD 539 million in social and sustainability bonds.
  3. Impact private equity: We will keep working toward our 10-percent impact target in private equity.
  4. Impact infrastructure private debt: Including direct private debt lending toward infrastructure such as solar/wind farms and social institutions.

Zurich will evaluate new prospective opportunities across asset classes to broaden the approach and increase the investment volume.

Our progress so far

Our impact investment portfolio grew from USD 3.8 billion in 2018 to USD 4.6 billion in 2019. The portfolio includes green bonds, as well as social and sustainability bonds, and commitments to seven private equity funds active in areas such as financial inclusion and clean technology, as well as private debt impact infrastructure investments such as wind or solar farms.

In 2018, we developed an impact measurement framework to track the success of our impact portfolio. Zurich is proud that its impact investments portfolio helped to avoid 2.8 million tons of CO2-equivalent emissions and, separately, improves the lives of 4.2 million people annually, as of December 2019.

Why we measure

On top of tracking our exposure and targeted returns, we want to know what each of our investments achieves in terms of impact, and to measure our contribution toward our impact investment objectives: mitigating environmental risks and increasing resilience. Measurement helps us make better investments decisions and allows us to communicate our value to our shareholders. It also demonstrates that financial returns can be balanced with environmental and social returns. When committing to specific impact targets as the first private-sector investor, we deliberately chose to challenge ourselves and the market to develop a methodology that allows us to measure impact on portfolio level – across asset classes and underlying investment instruments.

How we measure

The impact measurement framework we developed allows us to aggregate the impact across Zurich‘s impact portfolio in terms of two defined impact metrics: ‘CO2-equivalent emissions avoided’ and ‘the number of people who benefited.’ Data on emissions of greenhouse gases (generally quoted in tons of CO2-equivalent emissions) is a commonly used indicator to assess the climate impact of an asset as established by the IFI harmonized framework. ‘Avoided’ CO2 emissions are calculated against a baseline scenario that reflects the most likely project outcomes or level of service achieved in the higher-carbon status quo of the economy.

To measure our social objective to ‘increase resilience,’ we count the number of people who have benefited from Zurich’s investees’ services in education, housing or financial inclusion and other measures aimed at improving lives. In addition, in our measure of ‘the number of people who benefited,’ we only count those individuals who are part of a specific targeted audience of people, and were previously unable to access those services.

Zurich’s impact framework methodology looks only at the impact created by Zurich’s share of investments and is based on the information reported by the issuers of impact investing instruments.

Zurich is well on track in achieving the targeted impact goals of avoiding 5 million metric tons of CO2-equivalent emissions and improving the lives of 5 million people per year. For more information about our impact measurement framework please read the Impact measurement methodology paper.

impact combined 2019

1) Based on information reported by the issuers of impact investing instruments, ‘people benefited’ might include full target audience for some projects.
2) Scope: 80 percent green bond portfolio, 80 percent social/sustainability bond portfolio, impact private equity, impact infrastructure private debt, Swiss real estate.
3) Pro-rata: only the share of Zurich financed impact taken into account.
4) Timing: report and extrapolated data as of December 2019 for green and social bonds and impact. infrastructure private debt; reported data December 2018 for private equity funds and Swiss real estate.

  • Targeting USD 5bn of impact investments on portfolio level

    We believe that impact investment opportunities exist across various asset classes and across a spectrum of investments with more or less catalytic effects. We are committed to evaluating impact investment opportunities across the spectrum and, over time, build a portfolio of impact investments of up to USD 5 billion.

    In identifying potential impact investments, we will assess whether the investment meets our definition of impact investing (intentionality – measurability – profitability), supports our impact objectives (mitigating environmental risks and increasing community resilience), contributes to our impact targets (avoid the mission of five million tons of CO2 per year and make a positive contribution to the lives of five million people in need) and/or, contributes to development
    of the impact investing market.

    However, we also believe that impact investing will only be sustainable as an investment ‘style’ if it can be integrated into our overall approach to investment management. Opportunistic investments can supplement the portfolio occasionally. But in general, we want impact investments to be an integral part of the portfolio, not just one-offs.

  • Targeting USD 2 bn in Green bonds

    As a signatory to the United Nations Global Compact, we are committed to promoting greater environmental responsibility and encouraging development and ‘diffusion’ of environmentally- friendly technologies. Green bonds allow us to generate market-level returns and still achieve a positive impact. The proceeds are used for projects that mitigate climate change, help communities adapt to the consequences of climate change or generate other measurable environmental benefits. While many green bonds raise funds to address issues related to climate change, we are also investing in green bonds that provide financing to other areas of environmental concern as stipulated in the Green Bond Principles (GBP): natural resource depletion, loss of biodiversity, and air, water or soil pollution.

    As part of our impact investing strategy, in July 2014 we doubled our original commitment from November 2013: Market conditions permitting, we will invest up to USD 2 billion in green bonds in various currencies funded by our Australian, Asian, European, U.S. and Latin American balance sheets. We for the first time held over USD 2bn in green bonds in August 2017.

    When evaluating green bond investments, we apply criteria following the voluntary Green Bond Principles. More detailed information about our evaluation framework and principles can be found in the Zurich Whitepaper.

    A green solution to a grey growth outlook

    Time for governments to show their commitment

    A fortunate combination of circumstances, including historically low interest rates and an inflection point in sentiment towards climate change, is presenting governments with an opportunity to stimulate their ailing economies while repositioning their countries for a cleaner and more productive future.

    Download the report  
  • Allocating up to 10% of our private equity investment to target impact

    Through our impact investing strategy for private equity we intend to:

    • Help mitigate environmental risks by supporting a low-carbon economy and encouraging environmentally friendly technologies.
    • Increase community resilience by helping to build community capital and address the needs of populations that lack traditional means to achieve such goals.

    To achieve these objectives we will identify private equity funds whose investment strategies directly address those issues while at the same time targeting commercial financial returns, and will invest, based on a commercial due diligence process, with private equity fund managers willing to report on their non-financial impact.

    We selected the first private equity impact funds in 2014, focusing on clean technologies and inclusive finance. Over the coming years, we are aiming to allocate up to 10 percent of our private equity investments to impact funds.

  • Allocating up to 10% of our private equity investment to target impact

    We have allocated over six percent of our investment portfolio to real estate, around half of which is currently held in Switzerland. We are committed to reducing the energy consumption and carbon emissions of our Swiss real estate portfolio by 20 percent by 2020, and 80 percent by 2050, against a 2010 baseline. By the end of 2015, energy consumption has been reduced by 5 percent and greenhouse gas emissions by 6 percent. Currently we are investing in refurbishing and re-developing our properties to achieve these targets. Real estate, including commercial and residential property, consumes a significant amount of energy and is a major source of carbon emissions.

    Download the Zurich IMRE AG paper EN |  DE  | FR 

  • Defining Footprinting

    Every investment, regardless of asset class, has an impact on communities, people’s lives and the environment. Companies or assets such as buildings and infrastructure are built and operated, and in the process, jobs are created or lost; products are introduced, sold and consumed, or services delivered; natural resources harvested and processed; energy produced and consumed; waste and emissions created or mitigated. Accordingly, every investment has a footprint, both positive and negative, that affects the real economy, our environment and our communities. Tools have become increasingly available to measure such impacts. Examples are carbon emissions, or the share of ‘green’ and ‘brown’ revenues generated by portfolio companies. To better understand how Zurich’s investments affect the environment, we strive to apply new data and tools, starting with measuring our carbon ‘footprint.’

  • Defining impact investing

    In contrast, impact investing is centered on positive impacts and focused on smaller, but dedicated parts of the portfolio. At Zurich, we define impact investing as investment opportunities that allow us to intentionally target a specific social or environmental impact, provide a measurable impact, and are profitable meaning that they generate a financial return commensurate with their risk. Based on our experience as impact investor, we also differentiate between investments that are aligned with increasing our impact and those which serve to play a truly catalyzing role.


    Most investments have a positive impact, sometimes supporting job creation, or making better and cheaper products and services available. What sets impact investments apart is that they are carried out with a specific outcome in mind. The impact is not a side-effect; it becomes part of the investment objective. ‘Intentionality’ can be established through allocations to impact investments as part of a dedicated mandate or by reflecting impact criteria in the process to select investments for an existing portfolio. Intentionality can also stem from a specific project setup that by design targets a positive outcome, such as infrastructure that solely focusses on renewable energy generation, or social enterprises set up to solve a specific issue. Zurich defines the appropriate approach in the context of a specific asset class and investment structure.

    Our main impact objectives are mitigating environmental risks and increasing community resilience.

    Learn more about them in the Zurich Responsible Investment Whitepaper.


    When impact is part of the investment objective, it should be measured just like other investment objectives, such as risk, return or investment income. We acknowledge that impact is not easy to measure. Data may not be readily available, data quality may be poor, and randomized control groups may be required to establish outcomes with scientific rigor. In most cases, the cost to get proper measurement of the outcomes will be prohibitive. As a result, we are taking a pragmatic approach with respect to impact measurement, assessing approaches on a case-by-case basis. However, we will always require that reasonable attempts are made to measure impact quantitatively. Measurement may be limited to specific indicators that do not cover the full breadth of impact objectives; it may be supplemented by case studies; it may evolve, or it even may not be in place in the beginning if there is a solid commitment to establish it over time. However, we will not regard any investment as an impact investment if no attempt is made to measure impact.

    Standards around impact measurement, such as the Global Impact Investing Network’s (GIIN) Impact Reporting and Investment Standards (IRIS), The Investment Leaders Group’s (ILG) impact framework, or the Green Bond Principles’ (GBP)standardized impact metrics are starting to emerge, complementing approaches established and applied by development finance institutions. We encourage the use of these standards. As data quality improves over time and impact measurement gets more widely adopted, We expect that capital can be allocated more efficiently to where impact is generated most effectively.


    Impact investing is distinct from grant-making philanthropy. While grant making accepts financial ‘losses,’ in impact investing, capital is paid back to the investor. As institutional investors with a fiduciary responsibility to optimize returns for beneficiaries, we must be comfortable with the fact that the return of an impact investment does, in fact, adequately compensate for the underlying market risks.

    We acknowledge that many pressing social and environmental issues cannot be solved through purely commercial means, and that the role of grant funding and other sources of ‘concessionary’ capital is hugely important. However, given the massive scale of the solutions required to solve issues such as climate change, resource scarcity, global education, global health and many other challenges, we feel that it is equally crucial that an impact investment market develops; it should be one that is able to attract institutional investors with a responsibility to achieve economic returns, even if this requires public or philanthropic capital to de-risk investments. Institutional investors have access to capital in sufficient amounts to tackle many of the issues at hand, and we are looking to be part of that journey.

    Impact and deep impact – pushing the  borders for even higher impact

    We will target a range of impact investments: those who’s ‘impact’ is aligned with our stated impact objectives, with a focus on actively increasing our investments in assets in which we also have otherwise invested, such as for instance green bonds; and, on the other hand, those investments that are more ‘deep impact’ in nature and, as a result, require further effort in terms of investment processes, such as private market investments in emerging and frontier economies.

    While impact investing has enjoyed rising popularity in recent years, both as a term and an investment style, for many decades it has been practiced under different names. Currently no generally-accepted or ‘official’ definition for impact investment exists. However, there is a consensus emerging around some of its key characteristics, and Zurich’s definition of impact investing is very much aligned with this consensus.

    footprinting impact investing graph

Environmental Finance Bond Awards 2019 Winner

The judges of Environmental Finance's bond awards saluted Zurich Insurance Group's pioneering work on green, social and sustainability bonds. For Zurich, green bonds are part of its impact investment strategy. As of December 2019, Zurich had invested USD 3.1 billion in green bonds, and a further USD 539 million in social and sustainability bonds.

Johanna K?b, Head of Responsible Investment at Zurich, commented: "We remain committed to scaling this market with innovation and integrity, and have spent a lot of time as a very active investor in this space, also formally as part of the Green Bond Principles (GBP) executive committee and steering committee." One award judge said: "Zurich has been a pioneer in green bond investment. Johanna K?b has worked hard on the GBP executive committee."

Environmental Finance Bond Awards 2019 Winner


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