Environmental key performance indicators

Environmental indicators

Following Zurich’s approach to materiality, we have determined which operational environmental indicators are material for us:

Energy consumption within office buildings and internally managed data centers (electricity, heating) and resulting CO2e emissions
Certified renewable electricity purchased (e.g. Renewable Energy Certificates or Guarantee of Origin)
Business travel (distance, mode and fuel consumption/type) and resulting CO2e emissions (including air travel, rental cars, rail and car fleet)
Copy paper purchased (sheets and weight) including percent FSC certified; includes bulk printing where available

Of low materiality, but still tracked and reported on:

Other paper and paper products purchased for office use, and marketing materials
Water consumption within office buildings
Waste generated within office buildings

In line with our continuous improvement approach to environmental management, Zurich took advantage of the move to a new baseline year to holistically re-evaluate our environmental reporting methodology. We identified a number of improvements that would help further align us to evolving best practices:

Our baseline year’s data has been adjusted to exclude major divestitures – ensuring a more consistent scope across the years
Farmers Management Group Inc¹. was previously included in Zurich’s global reporting. The new 2015 baseline now excludes this business to align with our operational control boundary
The electricity extrapolation methodology has been re-aligned to regional electricity intensity figures to better reflect variances in building performance typically seen between regions
A heating extrapolation methodology has been defined and implemented
IT has developed a new extrapolation methodology to account for the electricity demand from our in-house servers where actual data is not available
Rail travel has been added to our scope 3 business travel
A new scope 3 category has been added to our reporting to account for emissions in energy generation/extraction and transmission loss
Moved to the Greenhouse Gas Protocol (GHG) / International Energy Agency (IEA) emissions factors as the primary factor set

⁽¹⁾ The Farmers Exchanges are owned by their policyholders. Farmers Group, Inc., a wholly owned subsidiary of Zurich Insurance Group, provides certain non-claims administrative and management services to the Farmers Exchanges as attorney-in-fact and receives fees for its services.

Detailed targets and results

Carbon emissions

Target #1: total carbon emissions - achieve and maintain an at least 20 percent reduction in total carbon emissions per employee compared to 2015 until 2025

Target #2: facilities emissions - achieve and maintain an at least 20 percent reduction in total facilities emissions per employee compared to 2015 until 2025

Target #3: travel emissions - achieve and maintain an at least 20 percent reduction in total business travel emissions per employee compared to 2015 until 2025

Zurich’s carbon performance is improving overall; however, as Group FTE numbers have reduced, our target indicators reflect a lower rate of progress when compared to our absolute data. Facilities emissions are challenged by high heating demand, which is directly related to the recent long and cold winters felt in Europe and North America (see energy tab for more details). Travel emissions have slightly improved against the great results realized in 2016, when Zurich implemented new, more efficient travel management practices.

What	Unit of measurement	2015 (Baseline)	2016	2017	2017 change relative to baseline	Target 2025
Absolute carbon emissions	CO2e (metric tons)	109,378	92,358	89,574	(18%)	n/a
Carbon emissions per employee	CO2e/FTE (metric tons)	2.43	2.08	2.06	(15%)	Achieve and maintain an at least 20 percent reduction
of which from facilities	CO2e/FTE (metric tons)	1.18	1.08	1.09	(8%)	Achieve and maintain an at least 20 percent reduction
of which from travel ⁽¹⁾	CO2e/FTE (metric tons)	1.24	1.01	0.97	(22%)	Achieve and maintain an at least 20 percent reduction
Scope 1 emissions⁽²⁾	CO2e (metric tons)	26,478	25,078	27,167	3%	n/a
Scope 2 emissions (market based methodology)⁽³⁾	CO2e (metric tons)	37,439	33,417	33,248	(11%)	n/a
Scope 3⁽⁴⁾	CO2e (metric tons)	45,461	33,863	29,159	(36%)	n/a

Parentheses around percentages or points indicate a reduction. The data covers 100 percent of our Group’s operations and the methodology is based on the Greenhouse Gas Protocol.

⁽¹⁾ Includes flights, rental cars, car fleet, and rail
⁽²⁾ Scope 1 emissions include direct emissions from our car fleet and heating produced at our facilities
⁽³⁾ Scope 2 emissions include indirect emissions from purchased electricity and district heating/cooling. Zurich calculates scope 2 emissions according to the Greenhouse Gas Protocol’s market based methodology
⁽⁴⁾ Scope 3 emissions include indirect emissions from air travel, rental cars, rail, energy production and generation losses, and electricity distribution losses

Energy consumption

Target #4: energy efficiency - achieve and maintain an at least 20% reduction in total energy per employee compared to 2015 until 2025

Target #5: renewable electricity - purchase certified renewable electricity wherever economically and operationally feasible

Zurich is demonstrating consistent reductions in electricity usage, which is a reflection of both energy and space efficiency gains across the real estate portfolio. Heating demand has struggled against long and cold winters in Europe and North America. Renewable electricity decreased a few percentage points due to disposal of facilities which had sourced renewable electricity.

What	Unit of measurement	2015 (Baseline)	2016	2017	2017 change relative to baseline	Target 2025
Absolute energy consumption	MWh	194,500	185,689	172,113	(12%)	n/a
of which electricity	MWh	144,241	132,648	119,697	(17%)	n/a
of which heating	MWh	50,258	53,041	52,416	4%	n/a
Energy consumption per employee	MWh / FTE	4.32	4.18	3.97	(8%)	Achieve and maintain an at least 20 percent reduction
Percent renewable electricity out of total electricity consumption	%	56%	57%	54%	(2pts)	purchase certified renewable electricity wherever economically and operationally feasible

Parentheses around percentages or points indicate a reduction. The data covers 100 percent of our Group operations

Paper

Zurich continues to explore ways to continue to reduce the amount of paper consumed as part of doing business, and use more environmentally-friendly paper produced through sustainable forest-management programs (Forest Stewardship Council – FSC).

Target #6: copy paper - achieve and maintain an at least 80 percent FSC certified paper purchased compared to 2015 levels

Zurich has achieved a notable reduction in overall copy paper use, however a significant portion of the reduced paper directly impacted Zurich’s target indicator – percent FSC. Zurich has defined FSC as the minimum environmental criteria, however FSC is not common, or price competitive, in all regions in which Zurich operates. We expect to see our percentage of FSC certified copy paper purchased increase through continued development of our sustainable sourcing strategy.

What	Unit of measurement	2015 (baseline)	2016	2017	2017 change relative to baseline	Target 2025
Absolute copy paper purchased	kg	1,315,013	1,069,563	866,128	(34%)	n/a
of which FSC	% FSC certified	68%	43%	38%	(30 pts)	Achieve and maintain an at least 80 percent FSC certified copy paper purchased compared to 2015 levels
Other paper purchased	kg	340,900	292,827	221,804	(35%)	n/a

Parentheses around percentages or points indicate a reduction.

Business travel

Zurich does not have a target on distance traveled for business purposes. The figure below is an aggregate of all kilometers traveled across air, rental car, car fleet, and rail.

What	Unit of measurement	2015 (baseline)	2016	2017	2017 change relative to baseline
Distance traveled	km	371,799,555	296,944,190	287,184,552	(23%)

Waste

Zurich does not have a target on waste. Where Zurich is directly responsible for waste management services, we have been very successful in ensuring the majority of waste is recycled⁵ . Currently Zurich captures waste data from approximately 35 percent of the space we occupy globally

What	Unit of measurement	2015 (baseline)	2016	2017	2017 change relative to baseline
Waste	kg	3,295,664	3,055,923	3,377,565	2%
% Recycled	%	65%	57%	63%	(2 pts)

Parentheses around percentages or points indicate a reduction.

⁽⁵⁾ The majority of Zurich’s facilities are managed by a third party, building management company

Water

Zurich does not have a target on water. Zurich currently captures water data from approximately 44 percent of the space we occupy globally⁶.

What	Unit of measurement	2015 (baseline)	2016	2017	2017 change relative to baseline
Water	m³	307,649	279,367	305,617	(1%)

Parentheses around percentages indicate a reduction.

⁽⁶⁾ The majority of Zurich’s facilities are managed by a third party, building management company

We consider an operational environmental indicator material when:

It is directly related to our core business (i.e. our insurance products from underwriting to claims handling)
It could potentially disrupt business operations if not handled appropriately
We are able to measure, manage and reduce the environmental impact
Our stakeholders consider it relevant

Verification of data

We are working to increase data transparency, quality and coverage of our environmental performance reporting. From 2013, Zurich engaged an external auditor (Pricewaterhouse Coopers AG) to verify all of our environmental data. PwC has provided limited assurance and has issued an assurance statement. More information and details about our environmental performance is provided in the sections above.