After a wave of insurers left an industry climate group under U.S. pressure, the Glasgow Financial Alliance for Net Zero (GFANZ) claimed on Friday that “political attacks” hinder insurers’ climate risk pricing.
Three of Europe’s largest insurers, Allianz (ALVG.DE), AXA (AXAF.PA), and SCOR (SCOR.PA), left the Net-Zero Insurance Alliance (NZIA) on Thursday after U.S. Republican attorney generals accused them of antitrust violations.
“These political attacks are now interfering with insurers’ independent efforts to price climate risk, which will harm policyholders, main street investors and local economies,” a spokesperson for GFANZ, an UN-backed coalition of financial institutions founded by ex-Bank of England Governor Mark Carney, said.
Japanese insurer SOMPO Holdings (8630.T) is the ninth insurer to leave the NZIA in less than two months and first outside Europe. SOMPO’s spokeswoman said their net zero pledge was “solid and unchanged” but did not explain its exit.
The NZIA, founded in 2021 and requires members to reduce their portfolio greenhouse gas emissions to net zero by 2050, is in doubt after several of the world’s largest insurers left.
Lloyd’s of London CEO John Neal told Reuters this week that the alliance needed to loosen its membership standards or face disintegration.
Sources indicate NZIA had multiple calls this week on the alliance’s possibilities.
Republican lawmakers have campaigned against financial institutions working to reduce carbon emissions as part of a larger pushback against firms incorporating environmental, social, and governance (ESG) issues in their decision-making.
Vanguard, one of the world’s largest asset managers, departed GFANZ in December, citing a desire for independence.
The NZIA website has 23 members, including Aviva (AV.L), Lloyd’s of London, and Tokio Marine Holdings (8766.T).
The NZIA sought legal guidance while determining member standards since it would be difficult to sue insurers for antitrust violations. Insurers fear a Republican showdown.
On Thursday, Consumers’ Research, a U.S. activist group critical of ESG practices, announced it would employ a mobile billboard outside NZIA members’ U.S. offices to persuade them to resign.
Most NZIA members and ex-members have large U.S. enterprises. Some insurers that left GFANZ remain in others.
“Despite these political headwinds, we will continue to support insurers’ efforts to manage climate risk and develop transition plans,” the GFANZ spokeswoman stated.
Before COP26 in Glasgow, Carney co-chaired GFANZ.
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