Insurance company Lloyd’s of London has announced its exit from a net-zero alliance for insurers—the sixth such organization to have pulled out from the initiative within a week.
The Net-Zero Insurance Alliance (NZIA), convened by the United Nations, seeks to commit group members, composed of the world’s leading insurers and reinsurers, to fighting climate change. As part of this, members have to transition their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050. On Friday, Lloyd’s of London quit the NZIA. This took the total number of members who have quit NZIA this week alone to six, which represents a fifth of the organization’s total of 30 members. Since March, a total of 10 members have quit NZIA.
The exodus of major insurance companies has raised questions about NZIA’s viability. None of the six firms that quit this week have made it clear why they left the initiative.
The insurance firms are said to have decided to pull out due to concerns about getting embroiled in disputes about net-zero initiatives in the United States. On May 15, attorneys generals from 23 American states sent a letter to 28 insurance companies asking for information about potential violations of antitrust laws.
In the letter, state AGs asked the firms to provide information regarding their membership in climate associations like the NZIA and the Net Zero Asset Owner Alliance (NZAOA), which is also sponsored by the United Nations.
“The insurance companies that are involved with this net zero program are, quite frankly, out on a plank, and they’ve sawed it off,” Robert Bork Jr., president of the Antitrust Education Project, said in an interview with The Epoch Times.
“The Sherman [Antitrust] Act is pretty explicit about restraint of trade, which is exactly what they’re doing here by denying insurance to companies that they think aren’t doing the right thing when it comes to climate change and getting to a net zero future.”
Just days before quitting, Lloyd’s Chief Executive John Neal had indicated that the NZIA could end up as a failure.
“There are five objectives, and you have 12 months to meet one of them and 36 months to meet three of them. NZIA need to have another look at what their objectives are, or the alliance will fall apart,” Neal said to Reuters.
On Wednesday, the United Nations Environment Programme (UNEP) admitted that four of the insurance firms that quit NZIA had done so due to “recent discussions within the United States.”
Initiatives like the NZIA and NZAOA are part of the environmental, social, and governance (ESG) agenda that push a range of leftist, progressive ideologies like gender equity and climate change onto corporations.
ESG is based on the idea that companies should be socially responsible and work intently to resolve perceived issues like racism, sexism, pollution, and climate change.
As such, firms are compelled to enact policies to achieve such objectives, which can include reducing carbon emissions and cutting down funding or not giving insurance to businesses that fail to meet carbon emission targets.
By forcing companies to prioritize ideological issues, the ESG agenda risks making these firms lose focus on their business priorities, including making profits. This can have negative consequences for businesses, investors, and the economy as a whole.
Republicans have been fighting the ESG push from Democrats led by the Biden administration. In March, the Republican-controlled House approved a measure to block Biden’s new rule that permitted including social justice and climate change principles as criteria for pension investments.
Sen. Rick Scott (R-Fla.) said that in allowing people’s pension funds to be used for ideological purposes, the Biden administration is “giving away the basic rights of American citizens to give more power to the radical left.”
“If you put money into a retirement plan, you expect to get the best return you can get; you expect that whoever is running it is a fiduciary to get the best return possible. What the Biden administration is saying is ‘no, you don’t have to do that … if you have some social agenda, you can focus on your social agenda.’”