A group of the world’s most prominent insurance and reinsurance companies has initiated an alliance in order to accelerate the global transition towards a net-zero emissions economy, as required by the Paris Agreement.
The companies have established the Net-Zero Insurance Alliance (NZIA), convened by United Nations Environment Programme (UNEP) Finance Initiative Principles for Sustainable Insurance (PSI) and they would work to shift underwriting portfolios towards net-zero greenhouse gas (GHG) emissions by 2050.
The eight founding members of the NZIA are AXA (NZIA Chair), Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group. Each of the companies will individually set intermediate targets every five years and report on progress annually in co-operation with competition authorities, the NZIA members said in a statement.
The move comes as insurers come under increasing pressure to spell out how they plan to decarbonize their businesses amid growing calls for them to stop underwriting and investing in fossil fuel projects.
“Through the Net-Zero Asset Owner Alliance launched in 2019, insurers and reinsurers are already working towards decarbonizing their investment portfolios in line with climate science and the Paris Agreement. 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.”
The NZIA members will set underwriting criteria for the most carbon-intensive activities in their underwriting portfolios and offer solutions for low-emission and zero-emission technologies. Further, they will include net-zero and decarbonization risk criteria in their risk management frameworks.
“By committing to join the gold standard alliance for net-zero, the (NZIA) will ultimately make underwriting contingent on underlying companies having credible net-zero transition strategies,” said Mr. Mark Carney, UN climate envoy.
The alliance, first outlined in April, was presented by Mr. Philippe Donnet, the chief executive of the Italian insurance company Generali, at the G20 Climate Summit in Venice.