Reinsurance News

UNEP to ‘strengthen and deepen’ work with re/insurance industry amid NZIA withdrawals

24th May 2023 - Author: Luke Gallin

With some major re/insurers having withdrawn from the Net-Zero Insurance Alliance (NZIA), the United Nations Environment Programme (UNEP) has stated that there’s a “fundamental and urgent” need for collaboration with the global insurance industry to successfully tackle the climate emergency.

Earlier this week, reinsurance giant Swiss Re became the latest to withdraw from the NZIA, which was convened by UNEP Finance Initiative’s Principles for Sustainable Insurance (PSI) at the G20 Climate Summit in Venice in 2021.

Swiss Re’s decision to leave the alliance followed that of Munich Re, Hannover Re, and Zurich.

Some cited a concern over whether antitrust related issues could emerge as the market advances its net-zero agenda, in the face of US lawmakers that have been pushing-back on some ESG initiatives.

Last week, a consortium of Republican state attorneys general wrote to insurers of the NZIA raising concerns about the legality of their commitments to collaborate with other insurers and asset owners in order to “advance an activist climate agenda.”

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Today, UNEP has released a public statement following discussions with the U.S. and members of the NZIA, noting that, as a voluntary initiative, companies are free to join or withdraw at any time and for any reason.

At the same time, the UNEP has reaffirmed its conviction that in order to “successfully tackle the climate emergency, there is a fundamental and urgent need for collaboration, not just individual action.”

The statement explains that the NZIA has provided a framework that allows re/insurers and other market participants around the world to individual start or accelerate their respective net-zero insurance journeys, enabling firms to take urgent and ambitious individual, unilateral action against the changing climate.

“This is why UNEP will continue to strengthen and deepen its collaborative work with the insurance industry and key stakeholders to advance net-zero insurance thinking and practices globally,” reads the statement.

The statement also highlights the recent Intergovernmental Panel on Climate Change (IPCC) AR6 Synthesis Report, which reiterates that the climate emergency is an unprecedented global crisis that requires urgent action by all in society in order to protect lives, livelihoods, assets, communities, cities, and countries.

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