A global climate alliance for insurers must make its membership rules less prescriptive or risk breaking up, the head of Lloyd’s of London said after political pressure from some US states – prompted some companies to leave.
The United Nations Environment Program (UNEP) on Wednesday said “recent discussions within the United States” are behind four insurance companies quitting the UN-convened Net Zero Insurance Alliance (NZIA ) in recent months.
In response, Lloyd’s Chief Executive John Neal told Reuters that the exits should lead to a rethinking of what it means to be a member of the group.
US Anti-ESG Rhetoric Prompts Urgent Talks as Insurers Quit Climate Coalition
“There are five goals, and you have 12 months to meet one of them and 36 months to meet three of them. NZIA needs to have a different view of what their goals are or the alliance will fall apart.
Neal added that Lloyd had complied with NZIA requirements and had no plans to exit. “We don’t need to precipitate it,” he said.
Republican federal and state lawmakers, governors, and attorneys general are driving increasing efforts by investors and executives to incorporate environmental, social and governance (ESG) factors into their business decision-making.
NZIA signatories, part of the Glasgow Financial Alliance for Net Zero set up by UN climate envoy Mark Carney, will hold a call on Thursday to discuss the situation in the United States and NZIA’s options including whether “keep it up or stop it,” a source familiar with the matter said.
That call will be followed by a meeting of the group’s steering committee, chaired by Renaud Guidee, AXA’s Group Chief Risk Officer, the source said, speaking on condition of anonymity because of the sensitivity of the matter.
An NZIA spokesman 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 businesses in the US.
This month, 23 US state Attorneys General told NZIA members that the group’s targets and requirements appear to violate 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 collusive action “to advance an activist climate agenda” that would have “severely harmful effects” on residents of their states.
“The push to force insurance companies and their clients to rapidly reduce their emissions leads not only to increased insurance costs, but also to higher gas prices and higher costs for products and services across the board, resulting in record-breaking inflation and fiscal hardship for the residents of our states,” they said.
UNEP said on Wednesday that members, particularly those with significant business or exposure to the US, “made the individual and unilateral decision to remain or leave” from the NZIA.
“Whatever the situation, UNEP has reaffirmed its conviction since it initiated, convened, and launched the NZIA that to successfully address 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)
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