Re/insurance heavyweights make 'historic commitment' to NZIA net-zero alliance
A group of eight global insurers and reinsurers have launched the UN-convened Net-Zero Insurance Alliance (NZIA) — making a "historic commitment" to transition their underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050.
The NZIA has been convened by UNEP Finance Initiative’s Principles for Sustainable Insurance (PSI) at the G20 Climate Summit in Venice. Its founding members are AXA (NZIA chair), Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group.
As members of the UN-convened Net-Zero Asset Owner Alliance (NZAOA) established in 2019, all eight re/insurers have pledged to "play their part" in accelerating the transition to a net-zero emissions economy by setting science-based 2025 decarbonisation targets for their respective investment portfolios.
Each of the participating re/insurers will set these targets every five years and independently report on their progress publicly and annually to contribute to achieving the goals of the Paris Climate Agreement, in cooperation with the respective competition authorities. They will also advocate for and engage in governmental policies for a science-based and socially just transition of economic sectors to net zero.
“Through the Net-Zero Asset Owner Alliance launched in 2019, insurers and reinsurers are already working towards decarbonising their investment portfolios in line with climate science and the Paris Agreement,” said Thomas Buberl, CEO of the AXA Group, which chairs the NZIA. “With this new Net-Zero Insurance Alliance, we are raising our climate ambition further by using our underwriting, claims, and risk management practices to help ensure and enable the transition to a resilient net-zero global economy.”
In the run up to COP26 this November, the NZIA membership is expected to grow to include more insurers, reinsurers, brokers and insurance market bodies from across the globe. The NZIA is set to join the UN Race to Zero campaign in order to become officially part of the Glasgow Financial Alliance for Net Zero (GFANZ) chaired by Mark Carney.
Inger Andersen, executive director of the UN Environment Programme (UNEP), said: “For generations, the insurance industry has served as society’s early warning system and risk manager by understanding, reducing, pricing and carrying risk. As we approach COP26 in Glasgow, the risks posed by global heating are escalating and the world is a long way from meeting the promises made when the Paris Climate Agreement was forged nearly six years ago.”
He added: “Along with governments, the insurance industry and wider financial sector have the power and responsibility to drive progress towards a net-zero economy and a sustainable future for all. Guided by science, I am pleased to see leading insurers embed the net-zero ambition in their core insurance business. I urge the rest of the global insurance industry to respond to the climate emergency and urgently follow the example set by the founding members of this pioneering alliance.”
Carney, the UN Special Envoy on Climate Action & Finance, the UK Prime Minister’s Finance Adviser for COP26, and Chair of the Glasgow Financial Alliance for Net Zero, commented: “Having a global financial system where every professional decision takes climate change into account requires harnessing the full role of the insurance industry as risk managers, insurers and investors for climate action. By committing to join the gold standard alliance for net zero, the Net-Zero Insurance Alliance will ultimately make underwriting contingent on underlying companies having credible net-zero transition strategies.”
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