Eight of the world’s largest insurance and reinsurance companies have launched the Net-Zero Insurance Alliance (NZIA) at the G20 Climate Summit in Venice today, committing to transition their underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050.
The United Nations Environment Programme Finance Initiative (UNEP FI) called it a “historic commitment” by the insurers and reinsurers to “play their part in accelerating the transition to a net-zero emissions economy, as required by the Paris Agreement.”
The Net-Zero Insurance Alliance (NZIA), which has been convened by UNEP Finance Initiative’s Principles for Sustainable Insurance (PSI), is launched by the eight global insurance and reinsurance players, which are AXA (NZIA Chair), Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group.
The move to transition to net zero underwriting portfolios is a step beyond the investment focused commitments more frequently seen, but how they get there is up to each company as they will set their own route to this objective.
Net-zero greenhouse gas (GHG) emissions by 2050 is said to be consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100, according to UNEP.
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As members of the the UN-convened Net-Zero Asset Owner Alliance (NZAOA) ,established in 2019, all eight of the re/insurers founding the NZIA are on a science-based path to 2025 decarbonisation targets for their investment portfolios as well, which is said to be in-line with a net-zero transition pathway.
Each of the re/insurers will now individually set science-based intermediate targets every five years and also report on their progress publicly and annually, while they will also advocate for and engage in governmental policies for a science-based and socially just transition of economic sectors to net zero, the launch announcement said.
“Through the Net-Zero Asset Owner Alliance launched in 2019, insurers and reinsurers are already working towards decarbonising their investment portfolios in line with climate science and the Paris Agreement,” explained Thomas Buberl, CEO of the AXA Group, which chairs the NZIA. “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.”