2.8 C
New York
Tuesday, March 19, 2024

More insurers desert net-zero alliance as U.N. climate group sounds alarm

3/3
More insurers desert net-zero alliance as U.N. climate group sounds alarm
© Reuters. FILE PHOTO: The logo of insurer Allianz SE is seen on the company building in Puteaux at the financial and business district of La Defense near Paris, outside Paris, France, May 14, 2018. REUTERS/Charles Platiau/File Photo

2/3

 

ALVG
+0.23%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

AV
+1.35%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

 

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

 

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

By Tommy Wilkes

LONDON (Reuters) -Lloyd’s of London became the sixth organisation to quit a net-zero alliance for insurers within 36 hours on Friday, as a U.N.-backed coalition of financial groups warned about the fallout of “political attacks” on insurers in the United States.

Lloyd’s joined Australia’s QBE Insurance in withdrawing from the Net-Zero Insurance Alliance (NZIA) on Friday. Germany’s Allianz (ETR:ALVG), France’s AXA and SCOR and Japan’s SOMPO Holdings left the day before following more accusations from U.S. Republican attorneys general that insurers are violating antitrust laws.

The NZIA has now lost a fifth of its members in a week — all of them major global insurers — and a total of 10 have quit since March, when it counted 30 members.

The exodus raises questions about the viability of the coalition, which was formed in 2021 and requires insurers commit to reducing greenhouse gas emissions in their underwriting portfolios to a net-zero level by 2050.

None of those quitting this week explained their decision, but sources familiar with the discussions say insurers have cited concerns about becoming embroiled in disputes with some Republicans.

“These political attacks are now interfering with insurers’ independent efforts to price climate risk, which will harm policyholders, main street investors and local economies,” a spokesperson for the U.N-backed Glasgow Financial Alliance for Net Zero (GFANZ), which was launched by former Bank of England Governor Mark Carney, said in a statement on Friday.

Lloyd’s of London CEO John Neal had told Reuters earlier this week the alliance needed to make its membership rules less prescriptive or it risked falling apart. A Lloyd’s spokesperson said on Friday the insurance market remained committed to its sustainability strategy.

Members of NZIA held a call on Thursday where some including Britain’s Aviva (LON:AV) urged the alliance to keep going while acknowledging it needed to find a solution before more firms quit, a person who was on the call said.

AXA’s Renaud Guidée, its Group Chief Risk Officer and until this week the NZIA Chair, told members the French insurer was leaving the alliance with a heavy heart because it felt its presence would be a distraction given the focus of U.S. Republicans, the person told Reuters.

“We are saddened by recent developments and will work with the U.N. and other members to seek an orderly resolution,” an Aviva spokesperson said in an emailed statement. The spokesperson said NZIA had played an important role developing standards and frameworks for insurers trying to meet net zero.

AXA did not respond to requests for comment.

GFANZ is expected to speak with remaining NZIA members individually and another members’ call is scheduled for next week, the person on Thursday’s call added.

Some Republican politicians have mounted a campaign against financial institutions collaborating to try to curb carbon emissions, part of a broader pushback against businesses using environmental, social and governance-related (ESG) factors in their decision-making.

Vanguard, one of the world’s biggest asset managers, in December left another alliance for fund managers, citing a need for independence, although other GFANZ groups have largely withstood the pressure.

REMAINING MEMBERS

The exodus has left NZIA with 21 members according to its website, many of them smaller insurance firms.

Legal experts say it would be hard to make a legal case against insurers for breaching antitrust laws, and the NZIA has taken legal advice when setting requirements for members. But insurers are worried about a showdown with U.S. Republicans.

Consumers’ Research, a U.S.-based activist group that has been highly critical of ESG policies, said on Thursday it would use a mobile billboard outside NZIA members’ U.S. offices to pressure them to quit.

Most of those that have left the NZIA have sizeable U.S. businesses. Some of these insurers also remain members of another GFANZ group, the Net-Zero Asset Owners Alliance.

Departing insurers, which have mostly declined to explain why they are leaving, say they remain committed to reducing emissions from their underwriting.

“Despite these political headwinds, we will continue to support insurers’ efforts to manage climate risk and develop transition plans,” the GFANZ spokesperson said.

GFANZ, co-chaired by Carney, was launched in 2021 ahead of the U.N. climate summit, COP26, in Glasgow.

Source: Investing.com

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,268FansLike
12,893FollowersFollow
730FollowersFollow
- Advertisement -

Latest Articles

Popular Articles