A global climate alliance for insurers needs to make its membership rules less prescriptive or risk falling apart, the boss of Lloyd’s of London said after political pressure from some U.S. states prompted some companies to leave.
The United Nations Environment Programme (UNEP) on Wednesday said “recent discussions within the United States” had been behind four insurance firms quitting the U.N.-convened Net Zero Insurance Alliance (NZIA) in recent months.
In response, Lloyd’s Chief Executive John Neal told Reuters the exits should lead to a rethink about what it means to be a member of the group.
Anti-ESG Rhetoric in U.S. Prompts Urgent Talks as Insurers Quit Climate Coalition
“There are five objectives, and you have 12 months to meet one of them and 36 months to meet three of them. NZIA need to have another look at what their objectives are or the alliance will fall apart.”
Neal added that Lloyd’s complied with NZIA’s requirements and had no plans to exit. “We don’t need to precipitate this,” he said.
Republican federal and state lawmakers, governors, and attorneys general have been pushing back on growing efforts by investors and executives to include environmental, social and governance (ESG) factors in their business decision making.
Signatories to NZIA, part of the Glasgow Financial Alliance for Net Zero set up by U.N. climate envoy Mark Carney, will hold a call on Thursday to discuss the situation in the United States and NZIA’s options including whether “to carry on or wind it up,” a source familiar with the matter said.
That call will be followed by a meeting of the group’s steering committee, which is chaired by Renaud Guidée, AXA’s Group Chief Risk Officer, the source said, speaking on condition of anonymity because of the sensitivity of the matter.
A spokesperson for NZIA did not immediately respond to a request for comment.
Reinsurer Swiss Re on Monday joined Munich Re, Zurich Insurance and Hannover Re in exiting NZIA. All four have significant U.S. businesses.
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 seen by Reuters.
They also accused insurers of collaborative action “to advance an activist climate agenda” which was having “serious detrimental effects” on the residents of their states.
“The push to force insurance companies and their clients to rapidly reduce their emissions has led not only to increased insurance costs, but also to high gas prices and higher costs for products and services across the board, resulting in record-breaking inflation and financial hardships for the residents of our states,” they said.
UNEP said on Wednesday that members, particularly those with sizeable U.S. businesses or exposure, had “made the individual and unilateral decision to either remain or withdraw” from NZIA.
“Regardless of the situation, UNEP reaffirms its conviction ever since it initiated, convened, and launched the NZIA that in order to successfully tackle the climate emergency, there is a fundamental and urgent need for collaboration, not just individual action.”
(Reporting by Tommy Reggiori Wilkes; editing by Jan Harvey, Kirsten Donovan)
- Swiss Re Becomes Fourth Insurer to Leave Net Zero Group
- Insurers Latest Target of U.S. AGs ESG Antitrust Concerns
- Hannover Re Latest Company to Leave Net-Zero Insurance Alliance
- Zurich Exits Insurance Climate Alliance, Days After Munich Re
- Munich Re Exits Insurance Climate Group, Citing ‘Material’ Legal Risks
Topics Excess Surplus Lloyd's London
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