Exclusive: Insurers look to ease UN climate alliance rules after ... - Reuters.com
Exclusive: Insurers look to ease UN climate alliance rules after member exodus - sources | Reuters
Exclusive: Insurers look to ease UN climate alliance rules after member exodus - sources
- Summary
- Companies
- Follows exits after group faced antitrust concerns in US
- Group set to remove 6-month deadline to publish targets
- Would turn Net-Zero Insurance Alliance into 'talking shop' - NGO
LONDON, July 4 (Reuters) - The remaining insurers in a United Nations-backed coalition aimed at tackling climate change are poised to loosen the alliance's membership requirements, after a recent exodus of members, according to two people familiar with the discussions.
The U.N.-convened Net-Zero Insurance Alliance (NZIA) is set to remove a six-month deadline for members to publish greenhouse gas emissions targets alongside other changes to make membership less prescriptive, the sources said.
The hope is to "steady the ship" and create space for ex-members to consider returning later, they said.
The NZIA has lost more than half its members including AXA (AXAF.PA), Lloyd's of London and Tokio Marine (8766.T) since attorneys general from 23 Republican-run U.S. states sent a May 15 letter seeking information about insurers' membership and threatening legal action.
The AGs said the NZIA's requirements for members to publish and meet greenhouse gas emission-reduction targets appeared to violate anti-trust laws, and that the alliance's actions had pushed up insurance and other costs for consumers.
Launched in 2021 to drive insurers' efforts to hit zero carbon emissions on a net basis by 2050 in their underwriting portfoliios, the NZIA is one of several industry coalitions under the Glasgow Financial Alliance for Net Zero (GFANZ) umbrella group.
The NZIA now has 12 members, down from a peak of 30. Other GFANZ alliances have also come under U.S. political pressure but have not seen many members leave.
CONCERN OVER POTENTIAL RULE CHANGES
The NZIA's 'target-setting protocol' published in January required insurers to publish their initial 2030 targets for reducing emissions by end-July, or within six months of joining for newer entrants, and then report their progress against the targets annually.
But remaining members, among them Britain's Aviva (AV.L), Italy's Generali (GASI.MI) and South Korea's Shinhan Life (055550.KS), want to avoid insurers publishing targets simultaneously, which could invite fresh accusations of anti-competitive collaboration, the first source said, speaking on condition of anonymity because of the sensitivity of the matter.
An NZIA spokesperson declined to comment.
The potential for looser rules was met with concern by environmental campaigners, who say insurers are already doing too little to curb emissions and that aggressive collective action is needed.
"The NZIA has had very minimal requirements and expectations of membership from the start," said Peter Bosshard, coordinator of the Insure our Future campaign.
"The target-setting is the only thing left," he added. Without such requirements "the NZIA would just become another industry talking shop".
Other proposals being discussed include making the alliance a broader forum where insurance industry bodies participate in areas like target-setting best practice, the first source said.
The changes under discussion have not been finalised, the sources said, and it's not clear how the alliance would deal with insurers that drag their feet in publishing targets.
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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.”