Zurich Insurance Group AG is leaving a coalition of major insurers that have committed to reach net-zero emissions, the second high profile exit from the group in a matter of days.
The Swiss insurer said in a statement that it’s withdrawing from the Net-Zero Insurance Alliance, which is a sub-unit of the larger Glasgow Financial Alliance for Net Zero. The move comes after Munich Re said Friday it also will exit the group, which was convened by the United Nations in 2021 and has about 30 members.
Zurich’s departure will raise further questions about the workability of voluntary industry associations targeting emissions reductions. While GFANZ, as the biggest finance sector initiative with sub-groups covering insurance to banking, has raised the awareness among senior executives about the need to address climate change, some members have complained it adds an administrative burden and may expose them to legal risks.
In its statement, Zurich said it plans to support customers in their transition to clean energy. “We continue to remain fully committed to our sustainability ambitions and to supporting the net-zero transition,” it said.
Officials for NZIA weren’t available for comment.
While Zurich has quit the insurance alliance, it remains a member of GFANZ through its continued presence in another sub-group: the Net-Zero Asset Owner Alliance. Munich Re is a member of that same group and said it departed the insurance alliance because of “material antitrust risks.” Zurich didn’t cite antitrust concerns as a reason for its exit.
Zurich is the latest big name exit from a GFANZ group. Late last year, Vanguard Group Inc., the world’s second-biggest asset manager, said membership ultimately wasn’t compatible with its index-tracking business model.
When firms join NZIA, they pledge to transition their insurance and reinsurance underwriting portfolios to net-zero emissions by 2050. They also promise to set individual intermediate emissions-reduction targets aligned with climate science and report on their progress annually.
The group counts AXA SA, Allianz SE, Aviva Plc and Assicurazioni Generali SpA among its members. Officials for Aviva and Generali said the companies are committed to the insurers’ alliance. Achieving net zero is “something companies can’t do in isolation,” the Aviva spokeswoman said.
An Allianz spokeswoman said the German firm is “monitoring developments” and praised UN-convened alliances such as the NZIA for being “world-leading in their efforts to mitigate climate change and to build climate resilience.”
A spokesman for AXA declined to comment on the French company’s continued membership of the alliance, as did officials from Hannover Re. Renaud Guidée, AXA’s group chief risk officer, serves as chair of the NZIA.
GFANZ is co-chaired by Mark Carney, a former governor of the Bank of England, and Michael Bloomberg, the founder of Bloomberg News parent Bloomberg LP.
Photograph: A flag flies outside the Zurich Insurance Group AG’s headquarters in Zurich, Switzerland, on Thursday, Feb. 11, 2016. Photo credit: Michele Limina/Bloomberg