’[It] opens the door for further net zero greenwashing by the insurance industry,’ says coordinator
The Net-Zero Insurance Alliance (NZIA) has been reduced “to an empty shell” after ditching all obligations for members to set or publish targets, according to Peter Bosshard, coordinator of the Insure Our Future campaign.
In a statement last week (5 July 2023), NZIA, which is convened by the UN Environment Programme (UNEP), said that each company who chooses to be a member ”unilaterally and independently decides on the steps on its path towards net zero”.
”Going forward, NZIA member companies have no obligation to set or publish targets,” it said.
“Rather, individual member companies will be responsible and publicly accountable for any targets they set, the methodologies used to set them, the timeline on which they decide to publish any targets and the progress they are making.”
Bosshard said it was unfortunate that UNEP ”caves to the fossil fuel lobby and abolishes the last material requirement which NZIA members have to fulfill”.
”This reduces the alliance to an empty shell and opens the door for further net zero greenwashing by the insurance industry,” he added.
Target setting
The NZIA was established in July 2021 by leading companies such as Axa (NZIA chair), Allianz, Aviva, Generali, Munich Re, Scor, Swiss Re, and Zurich Insurance Group.
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As part of the Glasgow Financial Alliance for Net Zero (GFANZ) initiated by UN special envoy Mark Carney in April 2021, its primary objective was to support (re)insurers in transitioning their underwriting portfolios to achieve net-zero greenhouse gas (GHG) emissions by 2050.
Bosshard explained that having a NZIA target-setting protocol ”will serve as a voluntary best practice guide to aid in the accurate measurement, standardisation, and comparability of science-based decarbonisation targets for insurance and reinsurance underwriting portfolios”.
”[It will] enhance overall transparency and accountability across the insurance industry on climate action,” he added.
Exits
This came following reports of the high-profile exits from the Net-Zero Insurance Alliance (NZIA) in May this year (2023),
Republican politicians in the US rose concerns in a letter to NZIA members earlier this month (15 May 2023), alleging an activist climate agenda was being advanced which they believed led to increased costs and financial hardship not only in insurance but across the board.
It also highlighted that under the nation’s antitrust laws, certain arrangements among business competitors were “strictly forbidden because they are unfair or unreasonably harmful to competition”.
However, the Insure Our Future campaign said that the NZIA’s target setting protocol did not violate any anti-trust laws and that the attacks of the US fossil fuel lobby on the alliance have no legal merit.
It added that there was a need for “regulators to step up and create a playing field” by rewiring companies to adopt “science-based transition planes”.
Insure explained: “The International Association of Insurance Supervisors (IAIS) should integrate this requirement into its insurance core principles and put the topic on the agenda when it convenes for its annual meeting in Tokyo in November.
“In the meantime, the Insure Our Future campaign will continue to hold insurance companies to account for their net zero commitments, including their commitments to set, publish and implement science based targets for reducing their insured emissions”.
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