Insurance giants team up for net-zero alliance, but urged to stop supporting fossil fuels
AXA, Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group have launched a new ‘Net-Zero Insurance Alliance’, whose members will have to deliver net zero emissions by 2050 in their insurance and reinsurance portfolios .
The eight founding members of the Alliance are already all members of the Net-Zero Asset Owner Alliance organized by the UN and all have either set scientific goals to decarbonize their portfolios online with net-zero by mid-September. century, or announced their intention to do so.
In a statement of commitment to the newly founded Alliance, they signaled their intention to go beyond these internal goals and advocate for national policies that would enable a “socially just transition of economic sectors to net zero. “.
The statement emphasizes that members will advocate for mandatory corporate disclosure frameworks that are “relevant to the net zero transition and the insurance industry,” including recommendations from the Climate-Related Financial Disclosures Task Force (TCFD ) and the Financial Reporting Nature Working Group (TNFD). They will also support national policies and international agreements credibly aligned with the United Nations Sustainable Development Goals (SDGs).
The statement also contains additional details on how insurers will meet their own net zero targets. It describes how members are to publish decarbonization targets for 2025 within six months of joining the initiative; develop sector-specific emission trajectories up to 1.5 ° C for high-emission industries; measure the risks and opportunities linked to decarbonisation and the climate and launch dedicated insurance and / or reinsurance products for low-emission and zero-emission technologies and nature-based solutions.
There is also a global commitment by insurers to take into account the roadmap to net zero by 2050 published by the International Energy Agency (IEA) this year. This roadmap indicates that investments for new coal-fired power plants without emission reduction measures and future fossil fuel supply projects – particularly more aggressive projects such as the tar sands and drilling in the Arctic – should be stopped immediately. It also states that no new gasoline or diesel cars are expected to be sold after 2035.
“For generations, the insurance industry has served as an early warning system and risk manager for society by understanding, reducing, pricing and bearing risk,” said Inder Andersen, United Nations Program Director for the environment (UNEP).
“As COP26 in Glasgow approaches, the risks posed by global warming are intensifying and the world is far from having kept the promises made when the Paris Climate Agreement was signed almost six years. have the power and responsibility to advance towards a net zero economy and a sustainable future for all.
“Guided by science, I am delighted to see leading insurers integrate net zero ambition into their core insurance business. this pioneer Alliance.
The new Alliance will notably become a member of the Glasgow Financial Alliance for Net-Zero (GFANZ) – a new initiative by the US and UK governments, designed to unite the global financial sector on the net-zero transition around COP26. As such, its commitments will need to be accredited by the UN’s Race to Zero campaign, which recently tightened its net-zero criteria over concerns about greenwashing.
Fossil fuel on fire
The Insure Our Future campaign coalition has said it “cautiously” welcomes the formation of the new Alliance. In a statement, the organization said it was pleased that the Alliance’s statement of commitment covers emissions in all areas, including indirect emissions (Scope 3).
However, Securing Our Future is now calling on all Alliance members to phase out their support for new fossil fuels, in line with IEA recommendations. He also wants the Alliance to do more to ensure that new members strengthen their position on fossil fuel insurance and reinsurance.
“In particular, it is worrying that no minimum coal subscription requirement has been set for joining the Alliance, while all of the founding members have already committed to cease insuring such projects,” said said Erwan Malary, insurance activist at Reclaim Finance.
Urgewald Insurance campaigner Regine Richter also highlighted that Allianz, AXA, Munich Re and Zurich are all ranked among the top oil and gas property and casualty insurers.
Join the conversation at edie’s sustainability investing conference
edie Sustainable investing conference returns in a virtual format for the second year in a row on July 13-14, with hundreds of professionals already registered to attend.
The conference will bring together business sustainability professionals and investor financial experts to discuss the range of challenges and opportunities that green recovery can bring. Experts like BlackRock, UKSIF, UBS Asset Management, CDP and WWF are on the list of high level speakers for the event.
Click here for a full schedule and to register for tickets.