UN climate alliance scraps emissions rules for insurers after exodus
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Nzia no longer requires member companies to set or publish targets after US political pressure led to a member exodus.
REUTERS
LONDON – The Net-Zero Insurance Alliance (Nzia) has ditched all requirements for members to set or publish greenhouse gas emission-reduction targets, the UN said on Wednesday, a major rewrite of its rules after US political pressure led to a member exodus.
The Nzia is one of several United Nations-backed alliances that are supposed to coalesce financial institutions to drive efforts towards reaching net-zero carbon emissions by 2050.
“Going forward, Nzia member companies have no obligation to set or publish targets: rather, individual member companies will be responsible and publicly accountable for any targets they set, the methodologies used to set them, the timeline on which they decide to publish any targets, and the progress they are making,” the UN Environment Programme (Unep) said in a statement.
The Nzia has lost more than half its members
The attorneys-general said the Nzia’s requirements for members to publish and meet greenhouse gas emission-reduction targets appeared to violate antitrust 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 emissions on a net basis by 2050 in their underwriting portfolios, 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 faced United States political pressure but have not seen many members leave.
Under the Nzia’s “Target-Setting Protocol” published in January, insurance members had until end-July to publish emissions targets for 2030 using recommended types of targets and were then required to update on their progress annually.
Watering down the membership rules so heavily will alarm environmental campaigners convinced insurers are not doing enough to cut emissions linked to their underwriting fast enough.
One campaigner has said that removing target-setting requirements would reduce the Nzia to little more than “a talking shop” and mark the alliance out for how little it requires of members versus other UN financial industry groups.
Insurers inside and outside the group say they remain committed to reaching net-zero by 2050 and will independently publish emissions targets with updates on their progress.
French firm AXA last week published its first emission-reduction goals for its insurance portfolio.
Members and non-members will be encouraged to use the Nzia’s target-setting protocol and its methodologies, but Unep said the protocol would now be “a voluntary best practice guide” for helping build and compare decarbonisation targets.
“Each company who chooses to be a member of the Nzia unilaterally and independently decides on the steps on its path towards net zero. Nzia membership does not involve any coordinated competitive conduct or exchanges of competitively sensitive information,” Unep said.
“Nzia members remain committed to the net-zero transition and are engaging with a broader community of stakeholders on the future evolution of the Nzia,” it added. REUTERS
