The insurance industry took a large step toward decarbonisation during the G20 Summit in 2021 by announcing the launch of Net Zero Insurance Alliance (NZIA). It was established with support from UNEP’s Principles for Sustainable Insurance (PSI) and aims to demonstrate the key role of the insurance industry as risk managers, insurers and investors in supporting the transition to a net-zero economy. This is a progressive step from the financial industry in publicly declaring their support for the net zero initiative.

NZIA have members from across risk management, insurance and investment, with some of the biggest global insurers boasting membership. There are 8 founding members and, as of February 2022, 20 firms have now signed up. Signatories include the following:

Without insurance, companies cannot operate – giving NZIA the potential to be incredibly influential in encouraging change amongst high emitting companies. NZIA supports existing frameworks such as Taskforce for Climate-related Financial Disclosure (TCFD) and are progressively supporting Taskforce on Nature-related Financial Disclosures (TNFD).

As NZIA is still in its infancy it is still in the process of producing a target setting protocol, which is due to be published by the end of 2022. This presents a risk to NZIA’s aim to show the progression of the risk management, insurance and investment industry. However, its support of existing frameworks and stipulation that members will need to set science based 5 year targets with the first target to be reached in 2027, is accessible to all.

NZIA is a progressive and necessary positive step from the insurance industry, and an excellent public declaration of support from the finance industry for decarbonisation.

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