The Net Zero Insurance Alliance (NZIA) is one of several climate coalitions to recently come under fire from Republican Attorneys General alleging that the pacts violate antitrust laws. Responsible Investor published an analysis of NZIA’s response to these allegations.
NZIA argues that the AGs do not properly understand its activities and highlight the voluntary nature of the initiative. The letter response from NZIA assets that the AGs’ investigations “appear to be based on a mistaken interpretation” of NZIA’s activities, which they argue do not constitute an unreasonable restraint of trade. NZIA states that its purpose is not political and is instead driven only by the threats the insurance industry faces as a result of climate change. The article cites a spokesperson for NZIA who highlights the business imperatives driving their coalition:
By participating in net-zero initiatives, insurers are further strengthening their role in protecting policyholders by protecting lives, livelihoods and assets, communities, businesses, and countries, from the devastating physical impacts of a warming planet.
Despite NZIA’s rebuttal, the organization is bleeding membership and has lost over 60% of its signatories. US antitrust enforcement remains a hurdle to climate coalitions as members continue to leave climate pacts. On July 4th, the Church of England Pensions Board quit the Net-Zero Asset Owner Alliance (NZAO). As organizations scatter and climate pacts begin to crumble, anti-ESG in the US continues to ramp up with House republicans declaring July “ESG month.” It is unclear if or when we will see an enforcement action based on the AGs’ antitrust legal theory, but for now it seems the risk is enough to dissuade climate pacts.
