Munich Re, one of Europe’s largest insurance companies, and the world’s biggest reinsurer, announced today that its was discontinuing its membership in the Net-Zero Insurance Alliance (NZIA), citing antitrust risk.
The NZIA was established in 2021, with Munich Re as a founding member, aimed at helping insurance companies accelerate the global transition to net zero greenhouse gas (GHG) emissions through their underwriting and risk management practices. Signatories commit to transitioning their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas (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.
The NZIA is also part the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed climate-focused multi-trillion dollar coalition of financial institutionsof 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).
The announcement marks the second high-profile exit from a GFANZ alliance, following the departure of investment giant Vanguard from the Net Zero Asset Managers initiative in December 2022.
In a statement announcing the NZIA exit, Joachim Wenning, CEO of Munich Re, said:
“In our view, the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited that it is more effective to pursue our climate ambition to reduce global warming individually.”
Despite leaving the alliance, Munich Re reiterated its climate targets, including reducing GHG emissions related to its investment portfolio by 29% by the end of 2025 and net zero by 2050, reducing its climate-related oil and gas industry exposure in such a way that there will be no associated net GHG emissions by 2050, and achieving net-zero GHG emissions in its operations by 2030. In October, the company announced that it would no longer provide insurance coverage or investment for new oil and gas projects, as part of a series of new guidelines supporting the company’s decarbonization goals.
“”Our climate commitment is unwavering. We follow scientific recommendations. To date we are decarbonizing even faster than what is required to reach net zero by 2050.”