The United Nations Environment Programme (UNEP) has harped on a “fundamental and urgent” need for collaboration with the global insurance industry to successfully tackle the climate emergency.
The agency’s call came amid concerns about major re-insurers withdrawal from the global Net-Zero Insurance Alliance (NZIA).
Earlier this week, another leading re-insurance the Swiss Re, announced its withdrawal from the alliance barely a few days after Munich Re, Hannover Re and Zurich withdrew from the alliance.
Some of the risk underwriting firms cited concerns 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.”
Concerned about the ugly development, the UNEP in a statement issued following discussions with the U.S. and members of the NZIA, maintained that as a voluntary initiative, companies were free to join or withdraw at any time and for any reason.
The UN agency, however, reaffirmed its belief that in order to “successfully tackle the climate emergency, there is a fundamental and urgent need for collaboration, not just individual action.”
The UNEP states that the NZIA has provided a framework that allows re/insurers and other market participants globally to individual start or accelerate their respective net-zero insurance endeavours, enabling firms to take urgent and ambitious individual, unilateral action against the changing climate.
It clarified: “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.”
The agency also highlighted 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.
It would be recalled that the NZIA was convened by UNEP Finance Initiative’s Principles for Sustainable Insurance (PSI) at the G20 Climate Summit in Venice in 2021.
