As a founding partner of RE100, Swiss Re is committed to becoming 100% powered by renewable electricity by 2020 - a lot of it coming from the company’s own energy production. Lasse Wallquist, Senior Environmental Management Specialist at Swiss Re, explains why investing in solar PV makes environmental and economic sense.
As global re/insurance company Swiss Re must consider climate change risks in its business; the need for risk-transfer solutions that help companies mitigate and adapt to climate change is growing.
For example, we can help businesses around the world to better protect themselves from and prepare for extreme weather events like hurricanes, heat waves and ice storms, which increase in frequency and severity. At the same time, Swiss Re is committed to raising awareness and advocating a worldwide policy framework for fighting climate change. And, staying true to the cause, in our own offices around the world Swiss Re is vigorously tackling its own carbon footprint.
In 2003, we launched our Greenhouse Neutral Program and started to operate carbon neutrally. This commitment included building our operations as energy efficiently as possible, sourcing as much green power as possible and buying carbon offsets for the remaining unavoidable CO2 emissions. Co-founding the RE100 initiative in 2014 was a logical next step in our strategy.
Energy consumption that sets effective incentives
We consider the purchase of carbon credits as a last resort to ensure carbon neutrality. In our view, emissions should be avoided directly at the source related to our energy consumption whenever possible.
Similarly, we strive for a direct impact of our power purchasing on the development of new renewable power production capacities. Therefore, we prefer the physical consumption of "green" electricity or long term contracts with producers over certificates bought retrospectively, which do not offer similar effective incentives.
In recent times we have seen that solar PV is becoming increasingly economically viable in some of our locations.
The Armonk Solar Project
We have been installing smaller solar plants with capacities of 50-100kW on the rooftops of some of our offices in Switzerland, Italy and the UK in recent years.
Now we are entering a whole different ball game.
This year we are investing approx. US$7 million into a 2MW solar power plant to be developed at Swiss Re Americas headquarter in Armonk, NY. Ten acres of panels, ground-mounted on our property, will generate more than 60% of the campus' power requirements. Construction begins in October 2016.
Making environmental and economic sense
One may ask whether it make sense for a financial service company to become a power producer and also whether this is of relevance. I could argue it does, and here are the main three reasons.
1. It benefits the bottom line
The Armonk solar project has an attractive payback of less than seven years. Federal and state incentives contribute to the economic benefit for Swiss Re. With a life expectancy exceeding 25 years, the plant will allow Swiss Re to save millions of dollars in the coming decades.
This is of relevance, because many companies - due to the nature of their business - don't yet worry about the cost of their electricity bills. They are however missing out on the new opportunities to significantly reduce their own energy consumption costs and do something good for the environment.
2. It will increase resilience of energy infrastructure
Although off-grid solutions with battery storage are not yet fully economically feasible today, they will most likely be in a few years. It will be a simple task to retrofit the Armonk solar plant with such a system. The resilience of the electricity grid is increased through active demand management. Our own resilience is improved by providing the Armonk campus with additional power in the event of an outage and by making us less dependent on fluctuating power prices.
3. It underlines Swiss Re's sustainability commitment
In the context of Swiss Re's extensive climate engagement, the Armonk Solar Project is an important milestone example of how we "walk the talk". It helps us to illustrate our concrete efforts for our customers, society and our employees. Already in the ideation phase of the project, enthusiasm from stakeholders and foremost from many employees was remarkable.
All of Swiss Re's solar projects offer great opportunities to engage employees on the topic of renewable energy. Our group-wide "COyou2 reduce and gain" program makes solar energy personally relevant. It encourages our colleagues to install their own solar panels on the rooftops of their homes. The COyou2 program subsidizes residential photovoltaic installations and other low carbon investments made by employees with up to US$4,000 or the equivalent in a local currency.
And what comes next? The direction is towards achieving 100% fossil free operations.