# Insurers flee climate alliance after ESG backlash in the U.S Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-05-26 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Insurers Exit Climate Alliance Over ESG Backlash Meta Description: Find out why major insurers are leaving the NZIA amid political opposition from U.S. Republicans and legal concerns over antitrust laws. Stay informed. URL: https://financedigest.com/insurers-flee-climate-alliance-after-esg-backlash-in-the-u-shtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-05-26t090213z2lynxmpej4o0lzrtroptp4allianz-logo-1736813965186-compressed.jpg) # Insurers flee climate alliance after ESG backlash in the U.S By Tommy Wilkes, Alexander Hübner and Tom Sims LONDON/FRANKFURT (Reuters) -A United Nations-convened climate alliance for insurers suffered at least three more departures on Thursday including the group’s chair, as insurance companies take fright in the face of opposition from U.S. Republican politicians. At least seven [members of the Net-Zero Insurance Alliance](https://www.financedigest.com/ospt-alliance-welcomes-cardtekas-full-member.html "Ospt Alliance Welcomes CardtekAs Full Member") (NZIA), which launched in 2021, have now left including five of the eight founding signatories. Departures on Thursday included AXA, whose Group [Chief Risk Officer](https://www.financedigest.com/inmobi-names-inderbir-singh-pall-as-chief-technology-officer-of-inmobi-advertising-platform.html "InMobi Names Inderbir Singh Pall as Chief Technology Officer of InMobi Advertising Platform") Renaud Guidée had chaired the alliance. The French insurer said in a statement it was leaving to “continue its individual [sustainability journey.”](https://www.financedigest.com/drive-embarks-on-digital-sustainability-journey-starting-with-streaming-technology-partner-seenthis.html "Drive embarks on digital sustainability journey, starting with streaming technology partner SeenThis") Germany’s Allianz and French reinsurer SCOR also quit. NZIA, part of the Glasgow Financial [Alliance for Net Zero set](https://www.financedigest.com/explainer-rightist-alliance-set-for-italian-election-victory.html "Explainer-Rightist alliance set for Italian election victory") up by U.N. [climate envoy](https://www.financedigest.com/u-s-climate-envoy-kerry-king-charles-at-cop27-would-be-very-powerful.html "U.S. climate envoy Kerry: King Charles at COP27 would be ‘very powerful’") Mark Carney, requires members to commit to reducing their greenhouse gas emissions. The group has been buffeted by growing political opposition from some Republicans in the United States, who say the group could be violating antitrust laws by working together to reduce clients’ [carbon emissions](https://www.financedigest.com/britain-tells-climate-talks-coal-era-ending-as-carbon-emissions-surge.html "Britain tells climate talks coal era ending as carbon emissions surge"). This month 23 U.S. state attorneys general told NZIA members that the [group’s targets](https://www.financedigest.com/catering-group-sodexo-targets-operating-margin-above-6-in-2025.html "Catering group Sodexo targets operating margin above 6% in 2025") and requirements appeared to violate both federal and state antitrust laws. They gave [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") a month to respond in a May 15 letter – the latest salvo from the Republicans against financial institutions factoring environmental, social and governance-related (ESG) factors into their decision making. NZIA members held [talks on Thursday to discuss the alliance’s](https://www.financedigest.com/renault-and-nissan-in-talks-that-could-reshape-autos-alliance.html "Renault and Nissan in talks that could reshape autos alliance") options, sources familiar with the group said. John Neal, CEO of [Lloyd’s of London](https://www.financedigest.com/lloyds-of-london-investigates-possible-cyber-attack.html "Lloyd’s of London investigates possible cyber attack"), which is a member, told Reuters on Wednesday the alliance needed to make its membership rules less prescriptive or risk falling apart. An NZIA spokesperson did not respond to requests for comment. According to the NZIA website, it still has 23 members including Aviva, Lloyd’s and Tokio Marine Holdings. Most of those which have left have sizeable U.S. businesses, but so do some of those still in. We must wonder whether their ditching of the [alliance has more to do with fears of losing business](https://www.financedigest.com/ntt-data-announces-strategic-investment-and-expands-business-alliance-with-marklogic.html "NTT DATA Announces Strategic Investment and Expands Business Alliance with MarkLogic") in the U.S. than real legal jeopardy,” said Patrick McCully, senior analyst at campaign [group Reclaim Finance](https://www.financedigest.com/finance-amongst-worst-offenders-as-74-of-security-incidents-come-from-within-organisations-not-hacking-groups.html "Finance amongst worst offenders as 74% of security incidents come from within organisations, not hacking groups"). Real climate leaders [need](https://www.financedigest.com/analysis-global-climate-coalitions-need-safer-harbour-from-antitrust-turbulence.html "Analysis-Global climate coalitions need safer harbour from antitrust turbulence") to fight climate denial, not cave in to it. What is crucial now is that insurers do not reverse their existing [climate pledges](https://www.financedigest.com/eu-to-urge-big-polluters-to-toughen-climate-pledges-by-cop27-summit-draft.html "EU to urge big polluters to toughen climate pledges by COP27 summit – draft"). If they cannot [act together, they must act alone.”](https://www.financedigest.com/electricity-exchanges-urge-spain-portugal-not-to-act-alone-on-power-prices.html "Electricity exchanges urge Spain, Portugal not to act alone on power prices") While other [financial industry](https://www.financedigest.com/quantum-cryptography-how-the-finance-industry-can-fortify-its-security-by-preparing-to-embrace-this-impending-technological-evolution.html "Quantum cryptography: how the finance industry can fortify its security by preparing to embrace this impending technological evolution") alliances including one for banks have not suffered many departures, the exit of so many of the world’s biggest insurers is a blow to U.N.-led efforts to harness the power of coalescing [financial institutions](https://www.financedigest.com/are-financial-institutions-making-the-most-out-of-their-customer-experience.html "Are financial institutions making the most out of their customer experience?") to try and drive emissions lower. Legal experts have told Reuters it would be difficult to make a legal case using antitrust rules against a company collaborating on tackling [climate change](https://www.financedigest.com/exclusive-hsbc-fund-arm-toughens-thermal-coal-policy-to-curb-climate-change.html "Exclusive-HSBC fund arm toughens thermal coal policy to curb climate change") through an alliance. The political backlash in parts of the United States had made insurers particularly sensitive to such accusations, they say. [Insurers which have left](https://www.financedigest.com/the-evolution-of-insurance-what-is-left-to-be-done.html "The evolution of insurance: what is left to be done") the NZIA, including Swiss Re, Munich Re, Zurich Insurance and Hannover Re, say their exits will not change their individual commitments to addressing climate change. Allianz said in an emailed statement on Thursday it had decided to leave the NZIA, and would stick to its own [climate goals](https://www.financedigest.com/countries-emissions-pledges-still-fall-short-of-global-climate-goals-un-says.html "Countries’ emissions pledges still fall short of global climate goals, UN says"). SCOR’s new CEO [announced its exit at its annual general meeting](https://www.financedigest.com/thomson-reuters-announces-suite-of-reference-data-capabilities-to-help-financial-industry-meet-mifid-ii-transparency-and-reporting-requirements.html "Thomson Reuters Announces Suite of Reference Data Capabilities to Help Financial Industry Meet MiFID II Transparency and Reporting Requirements") earlier on Thursday alongside some new climate and energy transition policies. A SCOR spokesman declined to provide any reason for the departure. (Reporting by Tommy Reggiori Wilkes in London and Alexander Huebner and Tom Sims in FrankfurtEditing by Kirsten Donovan, Matthew Lewis and Richard Chang) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---