(Reuters) — The remaining insurers in a U.N.-backed coalition aimed at tackling climate change are poised to ease the alliance’s membership requirements after a recent exodus of members, according to two people familiar with the discussions.
The UN-convened Net-Zero Insurance Alliance (NZIA) is set to remove a six-month deadline for members to publish greenhouse gas emissions targets along with other changes to make membership less prescriptive, the sources said.
The hope is to “steady the ship” and create room for ex-members to consider returning later, they said.
NZIA has lost more than half its members including AXA, Lloyd’s of London and Tokio Marine since attorneys general from 23 Republican-controlled US states sent a letter on May 1
5 seeking information on insurers’ membership and threatening legal action.The Attorneys General said the NZIA’s requirement for members to publish and meet targets for reducing greenhouse gas emissions appeared to breach antitrust laws and that the alliance’s actions had driven up insurance and other costs for consumers.
Launched in 2021 to drive insurers’ efforts to achieve net zero emissions in their insurance portfolios by 2050, NZIA is one of several industry coalitions under the umbrella group Glasgow Financial Alliance for Net Zero (GFANZ).
NZIA now has 12 members, down from a peak of 30. Other GFANZ alliances have also faced US political pressure but have not seen many members leave.
The NZIA’s “target setting protocol” published in January required insurers to publish their first 2030 emissions reduction targets by the end of July, or within six months of joining for newer entrants, and then report their progress towards the targets annually.
But remaining members, among them Britain’s Aviva, Italy’s Generali and South Korea’s Shinhan Life, want to avoid insurers publishing targets at the same time, which could invite fresh allegations of anti-competitive collusion, said the first source, who spoke on condition of anonymity because of the sensitivity. of the thing.
An NZIA spokesperson declined to comment.
The potential for looser rules has been met with concern by environmentalists, who say insurers are already doing too little to reduce emissions and that aggressive collective action is needed.
“NZIA has had very minimal requirements and expectations for membership from the beginning,” says Peter Bosshard, co-ordinator of the Insure Our Future campaign.
The alliance, Mr. Bosshard said, developed less stringent demands — such as not limiting fossil fuel insurance — than another investor coalition, the Net Zero Asset Owners Alliance, precisely to avoid accusations that it violated antitrust laws.
“The goal setting is the only thing left,” he added. Without such requirements, “NZIA would be just another industry speak shop.”
Other proposals being discussed include making the alliance a wider forum where insurance industry bodies participate in areas such as targeting best practice, the first source said.
The changes being discussed have not been finalized, the sources said, and it is not clear how the alliance would deal with insurers dragging their feet in publishing targets.
Insurers inside and outside the NZIA say they remain committed to their net zero pledges despite the backlash in the US.
They are confident that they are not violating antitrust rules, but companies that left the coalition were concerned about their exposure to regulatory and legal risks, given that US states are the industry’s primary regulator.
Insurers with little US exposure have also quit, threatening the alliance’s viability.
Insurance Australia Group declined to explain its exit last month. Canada’s Beneva said the US political debate around environmental, social and governance (ESG) criteria was “a distraction from the actions the company wants to rally around.”
Remaining members believe that NZIA still has a valuable role, pointing to methods developed to assess and report on emissions-related emissions.
France’s AXA, who chaired NZIA before quitting in May, last week published its first emissions targets for its insurance portfolio.
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