Climate Campaigners Welcome Net-Zero Underwriting Alliance With Caveats
December 12, 2020
December 12, 2020 – On the fifth anniversary of the Paris Agreement, Thomas Buberl, the CEO of the AXA Group, proposed the creation of a Net-Zero Underwriting Alliance (NZUA). The Insure Our Future campaign welcomed the proposal as a sign that insurers are increasingly accepting responsibility for the emissions of the projects they are underwriting. However, the campaign warned that the new alliance needs to combine long-term ambition with tangible short-term action in order to be meaningful.
Peter Bosshard, Coordinator of the Insure Our Future campaign, said: “The proposed Net-Zero Underwriting Alliance offers an opportunity for the insurance industry to align its business with a pathway to 1.5°C. In order to be credible, the members of the new alliance need to back up their long-term commitments with an immediate shift away from fossil fuel expansion projects.”
Lucie Pinson, Executive Director of Reclaim Finance, said: “The recent Production Gap Report found that we must reduce the production of fossil fuels by 6% every year until 2030 if we want to be consistent with a 1.5°C trajectory. The new initiative must act on science: Net-zero commitments by 2050 must include an immediate end to insuring new oil and gas production projects on top of any new coal projects, or they risk being seen as greenwashing.”
As society’s risk managers, insurance companies have a special responsibility to mitigate catastrophic climate change. They have access to the best climate science and some of them have warned about climate risks for many decades. As their underwriting restrictions on asbestos and coal have shown, insurers can support a rapid shift away from destructive products by no longer covering certain risks.
Regine Richter, Finance Campaigner at Urgewald, added: “Meaningful net-zero commitments need to learn from the failures of the past. They need to cover all greenhouse gas sources and cannot rely on unproven negative emissions technologies, unsustainable tree plantations and other dubious carbon offset schemes.”
The proposed NZUA follows the creation of a Net Zero Asset Owners Alliance (NZAOA) in September 2019, and the announcement of a new Net Zero Asset Managers Initiative on December 10. Insurance companies which are members of the NZAOA and will need to consider joining the new NZUA include Allianz, Aviva, AXA, Generali, Munich Re, QBE, SCOR, Swiss Re and Zurich.