LONDON — The Net-Zero Insurance Alliance (NZIA) has ditched all requirements for members to set or publish greenhouse gas emission-reduction targets, the U.N. said on Wednesday, a major rewrite of its rules after US political pressure led to a member exodus.
The NZIA is one of several United Nations (UN)-backed alliances that are supposed to coalesce financial institutions to drive efforts towards reaching net zero carbon emissions by 2050.
But the group has come under pressure this year from some Republican politicians in the United States, who accuse it of violating antitrust rules and pushing up insurance costs. More than half of NZIA’s members, fearing a regulatory and litigation blowback, have quit since attorneys general from 23 Republican-led US states in May sent a letter threatening legal action.
“Going forward, NZIA member companies have no obligation to set or publish targets: rather, individual member companies will be responsible and publicly accountable for any targets they set, the methodologies used to set them, the timeline on which they decide to publish any targets, and the progress they are making,” the U.N. Environment Programme (UNEP) said in a statement.
The statement confirms a Reuters story on Tuesday that the NZIA, which is down to 12 members from a peak of 30 after major firms such as AXA, Allianz and Tokio Marine quit, was set to ease the rules in a bid to keep the coalition going.
Under the NZIA’s “Target-Setting Protocol” published in January, insurance members had until end-July to publish emissions targets for 2030 using recommended types of targets and were then required to update on their progress annually.
Watering down the membership rules so heavily will alarm environmental campaigners convinced insurers are not doing enough to cut emissions linked to their underwriting fast enough.
One campaigner has said that removing target-setting requirements would reduce the NZIA to little more than “a talking shop” and mark the alliance out for how little it requires of members versus other U.N. financial industry groups.
Insurers inside and outside the group say they remain committed to reaching net zero by 2050 and will independently publish emissions targets with updates on their progress.
French firm AXA last week published its first emission-reduction goals for its insurance portfolio.
Members and non-members will be encouraged to use the NZIA’s target-setting protocol and its methodologies, but UNEP said the protocol would now be “a voluntary best practice guide” for helping build and compare decarbonization targets.
“Each company who chooses to be a member of the NZIA unilaterally and independently decides on the steps on its path towards net zero. NZIA membership does not involve any coordinated competitive conduct or exchanges of competitively sensitive information,” UNEP said.
“NZIA members remain committed to the net-zero transition and are engaging with a broader community of stakeholders on the future evolution of the NZIA,” it added. — Reuters