U.S. regulation fears drive insurers' climate alliance break-up
Repeats story that ran on Thursday, with no changes
By Tommy Wilkes
LONDON, June 1 (Reuters) -The success of Republicans in triggering the break-up of a coalition of insurance firms aimed at tackling climate change is down to U.S. states being the industry's primary regulator, interviews with industry executives and former officials show.
The U.N.-backed Net-Zero Insurance Alliance (NZIA), formed in 2019 to get insurers to commit to reducing greenhouse gas emissions in their underwriting portfolios to a net-zero level by 2050, has lost 12 of 28 members since attorneys general from 23 Republican-run U.S. states sent a letter to them on May 15. The letter sought information about the insurers' membership and threatened legal action over what it called anti-competitive behaviour pushing up prices.
Republicans say that by withholding insurance from specific sectors, such as oil and gas, insurers penalise businesses and drive up costs for companies and consumers.
The attorneys general have turned their attacks on environmental, social, and corporate governance (ESG) practices in the business world into a political rallying cry.
They have also targeted other climate coalitions of financial firms, including the Net-Zero Banking Alliance and the Net Zero Asset Managers initiative, with threats and requests for information. Yet these groups have not suffered a large number of defections, as the NZIA has.
The reason, two insurance industry sources and a former regulator told Reuters, is that states are the regulators of insurers, unlike major banks and asset managers that are overseen primarily at a federal level in the United States.
"The attorneys general have seized on these characteristics of the insurers to take advantage of them," said Dave Jones, former insurance commissioner in California and now director of the Climate Risk Initiative at the University of California, Berkeley.
Jones added that he did not believe that the attorneys generals' accusations of anticompetitive behaviour had merit.
Curtis Ravenel, a senior advisor at the United Nations-backed Glasgow Financial Alliance for Net Zero (GFANZ), an umbrella organization under which the NZIA sits, said insurers were less accustomed to political pressure than other financial services firms like banks.
"(The state attorneys general) are exploiting a fear factor given the authority they have," Ravenel told Reuters. He added that he did not expect other climate alliances to suffer many departures despite the pressure from Republicans, and urged the 16 insurance firms remaining at the NZIA to stay the course.
The alliance had failed to attract U.S. insurers to join. Most of the insurers which have left NZIA - including Spain's Mapfre MAP.MC, France's AXA AXAF.PA, which chaired the alliance, and Japan's Tokio Marine 8766.T and SOMPO 8630.T - have sizeable U.S. businesses.
Alarmed by the departures of their peers,the remaining NZIA members have been holding calls this week to decide on their next move, according to people familiar with the matter.
They have been unnerved by the spread of departures among insurers which have been assured by lawyers they are not violating U.S. antitrust laws, and by the exit in the past week of firms with tiny exposures to the United States, the people said.
Britain's Aviva AV.L and Dutch cooperative Achmea are among the insurers which say they plan to stay. Some firms point to the NZIA's achievements in creating a standardised methodology to measure and disclose emissions from underwriting portfolios.
Of the 15 insurers that have departed the NZIA, only one has explained its rationale publicly. Germany's Munich Re MUVGn.DE, the first to quit on March 31, said it was withdrawing from the group to avoid "material antitrust risks" given how much of the insurance market NZIA members represented. It did not reference U.S. state attorneys general.
Munich Re remains a member of another GFANZ group, the Net Zero Asset Owners Alliance (NZAOA), as does Allianz ALVG.DE, which quit the NZIA last week. Munich Re said that the share of global assets held by NZAOA members meant antitrust risks were "significantly lower".
Insurance companies will play a pivotal role in the world's shift away from a higher-carbon economy, given almost every project depends on their underwriting.
The NZIA, like other GFANZ alliances, requires members to align with the goal of the Paris Agreement to keep global temperature rises well below 2 degrees Celsius and preferably to 1.5 degrees. They do this by setting targets for cutting emissions.
The NZIA in January gave members six months to set targets. It left it up to insurers to specify the targets and decide how they cut emissions.
Many insurers have also been announcing climate targets independently. French insurer SCOR SCOR.PA, for example, announced limits on underwriting new gas fields and oil and gas exploration in the Arctic the same day it left NZIA last week.
"How much were insurers really getting out of it?" said Jones, predicting that the NZIA's demise would have little impact on insurance companies' climate efforts.
Reporting by Tommy Reggiori Wilkes in London
Additional reporting by Ross Kerber in Boston
Editing by Greg Roumeliotis and Susan Fenton
الأصول ذات الصلة
إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.