A number of European insurers are fleeing the Net Zero Insurance Alliance, which pushes firms to use their financial muscle to enforce the E—environmental—activism of the ESG trifecta. Two French firms, AXA and SCOR, along with Allianz from Germany, have decided to leave the UN-backed group focused on pushing the climate change agenda. Reuters reports:
A United Nations-convened climate alliance for insurers suffered at least three more departures on Thursday including the group’s chair, as insurance companies take fright in the face of opposition from U.S. Republican politicians.
At least seven members of the Net-Zero Insurance Alliance (NZIA), which launched in 2021, have now left including five of the eight founding signatories.
Departures on Thursday included AXA , whose Group Chief Risk Officer Renaud Guidée had chaired the alliance. The French insurer said in a statement it was leaving to “continue its individual sustainability journey.” Germany’s Allianz (ALVG.DE) and French reinsurer SCOR (SCOR.PA) also quit.
NZIA, part of the Glasgow Financial Alliance for Net Zero set up by U.N. climate envoy Mark Carney, requires members to commit to reducing their greenhouse gas emissions.
The group has been buffeted by growing political opposition from some Republicans in the United States, who say the group could be violating antitrust laws by working together to reduce clients’ carbon emissions.
This month 23 U.S. state attorneys general told NZIA members that the group’s targets and requirements appeared to violate both federal and state antitrust laws.
They gave insurers a month to respond in a May 15 letter – the latest salvo from the Republicans against financial institutions factoring environmental, social and governance-related (ESG) factors into their decision making.
NZIA members held talks on Thursday to discuss the alliance’s options, sources familiar with the group said.
John Neal, CEO of Lloyd’s of London, which is a member, told Reuters on Wednesday the alliance needed to make its membership rules less prescriptive or risk falling apart.
Action Line: The Net Zero Insurance Alliance is one of a web of such organizations falling under the umbrella of the Glasgow Financial Alliance for Net Zero. You may remember when The Vanguard Group exited the similar Net Zero Asset Managers initiative. The continued retreat by big firms from these alliances is evidence that the pushback against ESG is working. Don’t work with an adviser who puts the goals of a worldwide coalition ahead of their fiduciary duty to you. When you’re ready to talk to someone legally bound to their fiduciary duty, I’m here.
