Spanish insurance company MAPFRE announced today that it has decided to discontinue its membership in in the Net-Zero Insurance Alliance (NZIA), marking the latest in a string of major insurers exiting the UN Environment Program (UNEP)-backed climate action-focused industry group.

The NZIA was established in 2021, aimed at helping insurance companies accelerate the global transition to net zero greenhouse gas (GHG) emissions through their underwriting and risk management practices. Signatory commitments included transitioning insurance and reinsurance underwriting portfolios to net-zero GHG emissions by 2050, through areas including underwriting criteria and guidelines, engagement with clients, the development of insurance solutions for low-emission and zero-emission technologies and nature-based solutions, among others.

MAPFRE joined the alliance in April 2022.

Several major insurers, including some of the alliance’s founding members, have recently announced similar decisions to exit the NZIA, including Lloyds, AXA, Sompo, Allianz, Scor, Munich Re, Swiss Re and Zurich insurance Group, among others.

One of the key drivers of the moves to exit the group is building pressure from Republican politicians in the U.S., who have been warning financial institutions including insurers and asset owners of potential legal violations from their participation in climate-focused alliances. A recent letter sent by 23 U.S. state Attorneys General to members of the NZIA, warned the companies that the AGs “are concerned with the legality of your commitments to collaborate with other insurers and asset owners in order to advance an activist climate agenda,” citing specifically potential anti-trust violations from the coordinated actions of the group, as well as state laws, such as those that limit reasons for refusal to provide insurance.

MAPFRE’s premiums in the U.S. increased 28% last year to over €2.2 billion.

The NZIA is part the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed climate-focused multi-trillion dollar coalition of financial institutions that also include the Net Zero Asset Managers initiative (NZAM), the Net Zero Asset Owner Alliance (NZAOA), the Net Zero Banking Alliance (NZBA), the Net Zero Financial Service Providers Alliance (NZFSPA), the Net Zero Investment Consultants Initiative (NZICI), and the Paris Aligned Asset Owners (PAAO).

With limited exceptions, the NZIA has accounted for the significant majority of departures from GFANZ alliances, possibly due to unique status of the insurance industry in the U.S., which is largely regulated on a state by state basis, and potentially limiting the ability of anti-ESG politicians to pressure members of the other alliances to follow suit.

MAPFRE, for example, remains part of the Net Zero Asset Owner Alliance, which it joined earlier this year.

In its statement, MAPFRE said that despite leaving the group “remains committed to the deployment of its sustainability strategy, reaffirming the principles of contributing to an energy transition that sets people at the center, as well as supporting clients throughout their own energy transition.”

MAPFRE added:

“All public commitments announced by MAPFRE are maintained, including reaching net zero emissions globally by 2050, or sooner if possible, as we try to accelerate compliance with the objectives established in our Sustainability Plan.”

The decision follows MAPFRE’s announcement earlier this week of several climate-related achievements by the company, including reaching an overall carbon footprint reduction of 26%, compared to 2019, putting the company well ahead of plan on its pathway to its goals its operational carbon footprint by 50% and to becoming carbon neutral in all countries by 2030. Additional achievements revealed by the company included reducing its business travel carbon footprint by 68% since 2019, and of commuting by 14%.  Business travel and commuting account for more than 65% of the company’s total emissions.

The post MAPFRE Exits Net Zero Insurance Alliance first appeared on ESG Today.

The post MAPFRE Exits Net Zero Insurance Alliance appeared first on ESG Today.