Insurers are fleeing the Climate Coalition after the ESG backlash in the US

  • NZIA Chair AXA, Allianz and SCOR leave the alliance
  • The United Nations Group holds a call on the future
  • Some US Republicans have accused NZIA of antitrust violations

LONDON/FRANKFURT (May 25) (Reuters) – A United Nations climate alliance of insurers suffered at least three more departures on Thursday, including as the group’s chairman as insurers feared opposition from Republican US politicians.

No fewer than seven members of the Net-Zero Insurance Alliance (NZIA), which launched in 2021, including five of the eight founding signatories, have now departed.

Thursday’s departures included AXA, whose group chief risk officer is chairing the Renault Gedi alliance. The French insurer said in a statement that she was leaving to “continue her individual sustainability journey.” Germany’s Allianz (ALVG.DE) and French reinsurer SCOR (SCOR.PA) also pulled out.

NZIA, part of the Glasgow Finance Coalition for Net Zero set up by UN climate envoy Mark Carney, is asking members to commit to reducing greenhouse gas emissions.

The group has been rattled by growing political opposition from some Republicans in the United States, who say the group may be violating antitrust laws by working together to reduce customers’ carbon emissions.

Twenty-three US attorneys general this month told NZIA members that the group’s goals and requirements appear to violate both federal and state antitrust laws.

They gave insurers a month to respond in a letter dated May 15 — the latest blow from Republicans against financial institutions that factor environmental, social and governance (ESG) factors into decision-making.

Sources familiar with the group said NZIA members held talks on Thursday to discuss alliance options.

John Neal, chief executive of Lloyd’s of London, which is a member, told Reuters on Wednesday that the alliance needed to make its membership rules less prescriptive or risk collapsing.

A NZIA spokesperson did not respond to requests for comment.

According to the NZIA website, it still has 23 members including Aviva, Lloyd’s and Tokio Marine Holdings. Most of those who left have large businesses in the US, but there are some who remain as well.

“We have to ask whether their abandonment of the alliance has more to do with fears of losing business in the US than a real legal risk,” said Patrick McCauley, senior analyst at campaign group Reclaim Finance.

“Real climate leaders need to fight climate denial, not surrender to it. What’s important now is that insurance companies don’t reverse their current climate pledges. If they can’t work together, they must act alone.”

While other financial industry alliances, including those of banks, did not suffer many departures, the exit of several of the world’s largest insurers is a blow to UN-led efforts to harness the power of consolidation of financial institutions to try to cut emissions.

Legal experts told Reuters it would be difficult to bring a legal case using antitrust rules against a company that is collaborating on tackling climate change through a consortium.

They say the political backlash in parts of the United States has made insurers particularly sensitive to such accusations.

Insurers that have left NZIA, including Swiss Re (SRENH.S), Munich Re (MUVGn.DE), Zurich Insurance (ZURN.S) and Hannover Re (HNRGn.DE), say their exit will not change their individual obligations to the processing Climate change.

In an emailed statement Thursday, Allianz said it had decided to leave New Zealand, and would stick to its climate goals.

SCOR’s new CEO announced its exit at its annual general meeting earlier Thursday along with some new climate and energy transition policies. A SCOR spokesperson declined to give any reason for the departure.

Additional reporting by Tommy Rigiori-Wilkes in London and Alexander Hubner and Tom Sims in Frankfurt Editing by Christine Donovan, Matthew Lewis and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

Tom Sims

Thomson Reuters

Covers German finance with a focus on major banking, insurance, regulatory and financial crime, and previous experience with the Wall Street Journal and The New York Times in Europe and Asia.

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