Munich Re and Zurich have both announced their withdrawals from the Net-Zero Insurance Alliance (NZIA) in recent weeks, the latest blow to the Glasgow Financial Alliance for Net-Zero (GFANZ).
The NZIA is one of seven alliances formed under the umbrella of GFANZ, announced during the climate summit COP26 in 2021. Originally consisting of eight founding members, NZIA until recently consisted of 30 insurers and reinsurers who all committed to transitioning their portfolios to net-zero greenhouse gas emissions by 2050. GFANZ was created by Michael Bloomberg and Mark Carney as a way to accelerate the decarbonisation of the economy.
The reasons given by the two European insurers differ. Munich Re’s chief executive, Joachim Wenning, said in a statement that the firm was withdrawing out of antitrust concerns. “In our view, the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited that it is more effective to pursue our climate ambition to reduce global warming individually,” he said.
Zurich explained that, “after establishing a standardised methodology for measuring and disclosing greenhouse gas (GHG) emissions associated to insurance and reinsurance underwriting portfolios, we want to focus our resources to support our customers with their transition”.
Both firms reaffirmed their net-zero commitments, making clear that withdrawing from the NZIA would not affect their climate targets.
GFANZ has been plagued by challenges. The withdrawal by Munich Re and Zurich are not the first that GFANZ has seen as Vanguard withdrew from the Net-Zero Asset Managers Alliance last December. In addition, membership terms for GFANZ-affiliated alliances were weakened as a result of some large banks expressing concern that UN climate rules would become legally binding, such that commitments to net zero by 2050 were no longer required.
Following these changes, it is unclear what role GFANZ or its alliances will play, other than to simply help provide member firms with guidance to achieve climate targets members might set themselves, rather than serving as a commitment mechanism.
This page was last updated April 12, 2023
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