NZIA and Other Endangered Species

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    Joining a global sustainable initiative, preferably adorned by a fancy yet difficult-to-pronounce acronym and the blessing of the United Nations, used to be a no-brainer. You would attend an international convention (say, a COP), meet and greet a few like-minded peers, applaud the wise words of an inspirational speaker or two and get swiped away in the collective spirit.

    Before you knew it, you would be shaking hands and signing a joint statement, committing to collaborate towards a worthy, if sometimes vague, goal. Surely there is no harm in that! We do need to join forces if we are to address efficiently the enormous challenges that humanity is facing. And, by the way, the institution you represent could always benefit from a bit of positive press coverage.

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    Well, as many a CEO has discovered since, it is not all that simple. Take, for instance, the poor members of the venerable Glasgow Financial Alliance for Net Zero (GFANZ).

    On the one hand, they must endure the constant scrutiny of NGOs, investigative journalists and the like who are relentless about keeping the score, holding them accountable for those pledges they made in Glasgow and beyond. “GFANZ members are acting as climate arsonists,” wrote, for instance, Reclaim Finance Senior Analyst Paddy McCully in a recent report with the disturbing title Throwing Fuel on the Fire: GFANZ financing of fossil fuel expansion. “They’ve pledged to achieve net zero but are continuing to pour hundreds of billions of dollars into fossil fuel developers. GFANZ and its member alliances will only be credible once they up their game and insist that their members help bring a rapid end to the era of coal, oil and fossil gas expansion.”

    That is on the one hand, though. On the other hand, and the other side of the Atlantic, there is a consortium of Republican state attorneys general accusing GFANZ, and in particular one of their members, the Net-Zero Insurance Alliance (NZIA), of breaking the law to advance an activist climate agenda. “We, the undersigned attorneys general, have serious concerns about whether these numerous requirements [prescribed by NZIA’s ‘emissions reduction target’] square with federal law, as well as the laws of our states, as they apply to private actors,” write the AGs. “Under our nation’s antitrust laws and their state equivalents, it is well-established that certain arrangements among business competitors are strictly forbidden because they are unfair or unreasonably harmful to competition.”

    Squeezed between these modern versions of Scylla and Charybdis, it is hardly surprising that members of NZIA are dropping like flies off the alliance these days. The mass exodus commenced in March, with Munich Re, the world’s largest reinsurer and one of the initiative’s founding members, quietly quitting the group. Soon they were followed by Zurich and Hannover Re. More recently, the movement has become a veritable stampede to the exit. Last week saw the departures of AXA, whose Group Chief Risk Officer, Renaud Guidée, was the alliance’s Chairman, Germany’s Allianz and French reinsurer SCOR. And this week, Lloyd’s, QBE, and Tokio Marine, Japan’s largest insurer, followed suit. Is there anyone left, one wonders.

    “The kind of intimidation that led to the splintering of NZIA is more common in totalitarian regimes than democratic countries,” laments sustainability guru Sasja Beslik on LinkedIn. “It undermines very important sector initiatives badly needed to address the financial costs related to the climate emergency in the US and elsewhere.”

    I, too, hate to see the bullying tactics of the American AGs succeed. Yet, I can’t help but wonder if an alliance that can fall apart so easily is worth saving. Especially given its rather sketchy track record to date.

    Image courtesy of Dwi Rizki Tirtasujana from Pixabay
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