The French reinsurer SCOR SE is quitting the world’s main climate alliance for insurers, the latest in a string of defections as the industry reacts to a campaign by the Republican Party to put an end to coordinated ESG strategies.
(Bloomberg) — The French reinsurer SCOR SE is quitting the world’s main climate alliance for insurers, the latest in a string of defections as the industry reacts to a campaign by the Republican Party to put an end to coordinated ESG strategies.
Chief Executive Office Thierry Leger announced the decision to exit during SCOR’s annual general meeting, a spokesperson said by email on Thursday.
The move comes as the Net Zero Insurance Alliance holds an emergency meeting as some of its biggest members walk out, according to people familiar with the process who asked not to be identified discussing non-public information. The United Nations Environment Programme, which convened the NZIA in 2021, said on Wednesday that exits should be seen “in light of the recent discussions within the United States.”
The NZIA, which at its peak represented about 15% of global insurance premiums, is fast becoming the first major casualty of the GOP’s efforts to wipe environmental, social and governance considerations off the financial map. Senior members of the Republican Party have attacked ESG as a “woke” movement that they say is anti-American and dangerous to capitalism. They accuse NZIA of potential antitrust breaches and have linked its work to higher insurance costs and gas prices.
Against that backdrop, NZIA has now lost five major insurers, including Munich Re and Swiss Re, in an exodus that started at the end of March. All insurers that have quit the coalition say they’ll continue to target sustainable climate goals, just not as part of the insurance alliance.
“This kind of intimidation is more common in totalitarian regimes then democratic countries and undermines very important sector initiatives badly needed to address the financial costs related to the climate emergency in the US and elsewhere,” said Sasja Beslik, a sustainable finance veteran.
Lawyers following the situation suggest that the GOP’s arguments are unlikely to stand up to scrutiny in the courts. Beslik agrees, and says that firms bowing to GOP pressure risk “losing credibility” with ESG investors.
“It is a total overreaction and depressing to see how little real commitment departing companies have,” he said.
Insurers are reacting to targeted attacks by the GOP, as the party threatens legal action against firms that coordinate their ESG policies. In a May 15 letter, attorneys general representing 23 US states said they were “concerned with the legality” of the NZIA, and linked the alliance to “record-breaking” inflation.
Karl Racine, a former attorney general of the District of Columbia who’s now a partner at Hogan Lovells, says that “while the strength of the legal arguments underlying these claims does not appear to be strong,” the chilling effect of the campaign is real.
NZIA is one of eight sub-groups that make up the Glasgow Financial Alliance for Net Zero. The umbrella organization is co-chaired by Mark Carney, a former governor of the Bank of England, and Michael Bloomberg, the founder of Bloomberg News parent Bloomberg LP.
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