Top Insurers, Reinsurers Form Climate Change Group Net-Zero Insurance Alliance
All eight founding members are already individually setting science-based 2025 decarbonization targets for their respective investment portfolios in line with a net-zero transition.
- David Pilla
- August 2021
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.
Eight of the world's top insurers and reinsurers committed to accelerating in aiding the transition to net-zero emissions economy under the Paris Agreement on climate change by forming an alliance, convened by the United Nations Environment Programme Finance Initiative's Principles for Sustainable Insurance.
The companies have committed to transition their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas emissions by 2050, consistent with a maximum temperature rise of 1.5 C above pre-industrial levels by 2100, the Net-Zero Insurance Alliance said in a statement. Each company will decide how it will achieve this objective.
The eight founding members of the alliance are Axa, which is chairing the group; Allianz; Aviva; Generali; Munich Re; Scor; Swiss Re and Zurich Insurance Group. The group said it is seeking climate leadership as investors through the NZIA as well as its membership in the United Nations-convened Net-Zero Asset Owner Alliance, established in 2019.
All eight NZIA founding members are already individually setting science-based 2025 decarbonization targets for their respective investment portfolios in line with a net-zero transition, the NZIA said.
The member companies will individually set science-based intermediate targets every five years and independently report on their progress publicly and yearly, the NZIA said.
“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,” Thomas Buberl, chief executive officer, Axa, said in a statement.
As a founding member, Scor will transition all operational and attributable greenhouse gas emissions from its insurance and reinsurance underwriting portfolios to net-zero emissions by 2050, and support the implementation of corporate disclosure frameworks and global policy frameworks relevant to the net-zero transition and the insurance industry, the reinsurer said in a separate statement.
“Collective action is the only way we can address the grand challenge of our time: climate change,” Laurent Rousseau, CEO, Scor, said in a statement.
Scor said it is committed to a phased withdrawal of insurance and facultative reinsurance coverage from unabated coal-fired power plants by 2030 for OECD countries and by 2040 for the rest of the world. The reinsurer said this commitment extends to its portfolio of reinsurance treaties and begins by strengthening Scor's underwriting guidelines for 2022 to screen for all reinsurance treaties with more than 10% coal-related premiums.
Insurance companies must be one element in the battle against climate change, and all parties must put low-income and isolated communities—those most vulnerable to the effects of extreme weather events caused by climate change—at the center of solutions, said members of a climate insurance working group.