Daily Management Review

Net-Zero Climate Alliance Launched By Major Insurance Firms


Net-Zero Climate Alliance Launched By Major Insurance Firms
An alliance has been created by eight of the leading insurance and reinsurance companies of the world. Launching the alliance, the companies said on Sunday that this new entity will work for speeding up the process of transition of the economy towards achieving net zero emissions. 
The alliance has been christened the Net-Zero Insurance Alliance (NZIA) and it will work to shift underwriting portfolios towards achieving net-zero greenhouse gas emissions by 2050, said the companies which include the top three insurers of Europe in terms of premiums - Allianz, AXA and Generali.
This measure by the companies comes at a time when there is increasing pressure on insurers to lay bare clear pathways about how the companies plan to decarbonise their businesses even amid increased demand from the industry of stopping underwriting and investing in projects that are related to or are powered by fossil fuel that causes emission of greenhouse gases.
The NZIA members said in a statement that it has been decided that every five years, each one of the companies in the alliance will set intermediate targets at the individual corporate level and publish annual public reports on the progress that they make in cooperation with competition authorities.
"With this new Net-Zero Insurance Alliance, we are raising our climate ambition further," said Thomas Buberl, Chief Executive of the AXA Group, which chairs the NZIA.
Aviva, Munich Re, SCOR, Swiss Re and Zurich Insurance Group have also signed up to be a part of the new alliance. The criteria for underwriting for the most carbon-intensive activities of the underwriting portfolios of the NZIA members will be set by the alliance as well as offer solutions for development of low carbon emission and zero emission technologies.
The risk management frameworks will also include risks associated with net-zero and decarbonisation risks in their portfolios.
"By committing to join the gold standard alliance for net zero, the (NZIA) will ultimately make underwriting contingent on underlying companies having credible net-zero transition strategies," said U.N. climate envoy Mark Carney.
The outline of the alliance was first unveiled in April this year and the latest form of the alliance was presented at Sunday's G20 Climate Summit in Venice, Italy, by Generali CEO Philippe Donnet.
Climate friendly policies have already been adopted by many of the leading Europe based insurers. For example, a target of achieving carbon neutrality in its direct investment portfolio by 2050 was announced last month by Generali.