Republicans causing collapse of UN ESG Group.

“Real climate leaders need to fight climate denial, not cave in to it. What is crucial now is that insurers do not reverse their existing climate pledges. If they cannot act together, they must act alone.”

At least three more insurance companies have left the Net-Zero Insurance Alliance (NZIA), a United Nations-convened climate alliance for insurers, including the group’s chair, AXA. The departures bring the total number of companies leaving the alliance to seven, including five of the eight founding signatories. The NZIA requires members to commit to reducing their greenhouse gas emissions.

The departures were prompted by growing political opposition from some Republicans in the United States, who claim that the group could be violating antitrust laws by working together to reduce clients’ carbon emissions. This month, 23 U.S. state attorneys general told NZIA members that the group’s targets and requirements appeared to violate both federal and state antitrust laws.

Despite the departures, the NZIA still has 23 members, including Aviva, Lloyd’s, and Tokio Marine Holdings. However, the exit of so many of the world’s biggest insurers is a blow to U.N.-led efforts to harness the power of coalescing financial institutions to try and drive emissions lower.

Insurers Must Not Reverse Their Existing Climate Pledges

Patrick McCully, Senior Analyst at Reclaim Finance, has urged insurers to remain committed to their existing climate pledges, stating that “real climate leaders need to fight climate denial, not cave in to it.” He also emphasized that if insurers cannot act together, they must act alone.

Legal experts have told Reuters that it would be difficult to make a legal case using antitrust rules against a company collaborating on tackling climate change through an alliance. However, the political backlash in parts of the United States has made insurers particularly sensitive to such accusations.

Insurers Leaving the NZIA Will Stick to Their Own Climate Goals

Insurers which have left the NZIA, including Swiss Re, Munich Re, Zurich Insurance, and Hannover Re, have stated that their exits will not change their individual commitments to addressing climate change. Allianz, which also left the NZIA, said in an emailed statement that it had decided to leave and would stick to its own climate goals. SCOR’s new CEO announced its exit at its annual general meeting earlier on Thursday alongside some new climate and energy transition policies.

NZIA members held talks on Thursday to discuss the alliance’s options, and John Neal, CEO 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 falling apart.

Despite the challenges, it is crucial that insurers remain committed to addressing climate change and continue to work towards reducing their greenhouse gas emissions.