Chalk one up for the Anti-ESG movement as threats of antitrust enforcement appear to have put the final nail in the UN Environmental Programme’s (UNEP’s) Net-Zero Insurance Alliance (NZIA). The UNEP announced last week that the coalition would be discontinued – but rising from the ashes of the NZIA is the Forum for Insurance Transition to Net Zero (FIT). FIT will be less prescriptive than the NZIA, only requiring members to agree to its four main principles and notably not requiring members to set net-zero targets. Additionally, unlike the NZIA, FIT will not be part of the Glasgow Financial Alliance for Net Zero. However, companies aren’t entirely sold on the rebrand. Responsible Investor reports:
“While SCOR and Munich Re said they did not plan to join, other insurers who dropped out of NZIA were less committal. A spokesperson for Zurich noted that the group is a long-standing member of the Principles for Sustainable Insurance. ‘We review our participation in their initiatives on an ongoing basis taking into account Zurich’s and its stakeholders’ best interests,’ they added.”
Despite the lukewarm reception of FIT, several organizations that departed from the NZIA joined FIT including Beazley and IAG. Additionally, the article points out that FIT comes with a renewed focus on legal concerns, as the organization is now represented by international law firm Freshfields and consulting with antitrust and competition law experts at Norton Rose Fulbright and Clearly Gottlieb.
These recent events appear to have answered a question I posed last year: Does anti-ESG need to win to succeed? At the time I mused that anti-ESG sentiment does not need to win in the courtroom to win in the boardroom. Seems that was right. After all, no regulatory enforcement was brought against the members of the NZIA – it was only threatened. These threats alone appear to have brought down the NZIA, replacing it with a watered-down version of its former self. Is this enough to satisfy anti-ESG proponents, or will this success merely energize them to pursue more?
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