Swiss Re says its environmental, social and governance (ESG) benchmarks, introduced last year, are now being applied to almost the entire investment portfolio.

The reinsurer says the quality of ESG investments in its corporate credit portfolio has improved without any compromise on financial performance.

Long-term, risk-adjusted returns are more favourable when ESG is taken into account.

However, regular and standardised reporting on ESG risk and clear definitions are needed if it is to be fully integrated into the investment process. ESG is of low importance in financial analysis, with ratings agencies still considering including the criteria, Swiss Re says.