Carney's climate alliance sounds alarm on "political attacks" on ... - Reuters
Carney's climate alliance sounds alarm on "political attacks" on insurers | Reuters
Carney's climate alliance sounds alarm on "political attacks" on insurers
[1/3] 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
- Summary
- Companies
- Warning follows exit of insurers from climate alliance
- Allianz, AXA and SCOR quit the group on Thursday
- U.S. Republicans say insurers could be breaking antitrust laws
LONDON, May 26 (Reuters) - "Political attacks" are interfering with insurers' efforts to price climate risks, the Glasgow Financial Alliance for Net Zero said on Friday, after a wave of insurers quit an industry climate group following pressure in the United States.
"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 GFANZ, a United Nations-backed coalition of financial institutions launched by ex-Bank of England Governor Mark Carney, said in a statement.
Allianz (ALVG.DE), AXA (AXAF.PA) and SCOR (SCOR.PA), three of Europe's biggest insurance firms, on Thursday became the latest insurers to quit the Net-Zero Insurance Alliance following accusations from some U.S. Republican Attorneys General that they are violating antitrust laws.
Japan's SOMPO Holdings (8630.T), a major Asian insurer, was no longer on the list of members on NZIA's website on Friday. It would be the first insurer outside of Europe to quit the alliance. A SOMPO spokesperson did not immediately respond to a request for comment.
The exodus of some of the world's biggest insurers has raised questions about the viability of the NZIA, which was established in 2021. Lloyd's of London CEO John Neal told Reuters this week the alliance needed to make its membership rules less prescriptive or it risked falling apart.
NZIA members held several calls this week on the alliance's options, sources say.
Some Republican politicians have mounted a campaign against financial institutions collaborating to try and rein in carbon emissions, part of a broader push back against businesses using environmental, social and governance-related 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.
According to the NZIA website, it now has 23 members including Aviva, Lloyd's of London and Tokio Marine Holdings.
Legal experts say it would be hard to make a legal case against insurers for breaching antitrust laws, and the NZIA has sought legal advice when setting requirements for members. But insurers are worried about a showdown with Republicans mounting a high-profile campaign.
Consumers' Research, an activist group that has been highly critical of ESG policies, said on Thursday it would use a mobile billboard outside of NZIA members' U.S. offices to pressure them to quit.
Most of those to have left the NZIA have sizeable U.S. businesses, but so do some of those still in the group. Some of the insurers to have quit also remain part of other GFANZ alliances.
"Despite these political headwinds, we will continue to support insurers' efforts to manage climate risk and develop transition plans," the GFANZ spokesperson said in the statement.
GFANZ, co-Chaired by Carney, was launched in 2021 ahead of the U.N. climate summit, COP26, in Glasgow.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”