World-Leading Insurers and United Nations Launch Pioneering Target-Setting Protocol to Accelerate Transition to Net-Zero Economy
Davos, 17 January 2023 – The United Nations-convened Net-Zero Insurance Alliance (NZIA) today launched the Alliance’s first Target-Setting Protocol at the World Economic Forum’s Annual Meeting in Davos, Switzerland.
As risk managers, insurers and investors, the insurance industry has an important role to play in the transition to a net-zero emissions global economy by supporting their clients in taking concrete action to achieve net zero.
Version 1.0 of the NZIA Target-Setting Protocol (the Protocol) will enable NZIA members to begin to independently set science-based, intermediate targets for their respective insurance and reinsurance underwriting portfolios in line with a net-zero transition pathway consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100. With the launch of the Protocol, existing NZIA members are required to set and disclose their initial target(s) by 31 July 2023.
This important milestone comes 18 months after the Alliance’s launch at the 2021 G20 Climate Summit in Venice by eight of the world’s leading insurers and reinsurers. Since then, the Alliance has grown to 29 insurers and reinsurers representing about 15% of world premium volume globally.
“ The NZIA’s first Target-Setting Protocol is a landmark breakthrough. For the first time ever, insurance and reinsurance companies among the largest globally have built a framework and measurement tools to assess the impact of their activities on climate change. The NZIA’s Target-Setting Protocol will serve as a catalyst to set unprecedented and ambitious targets towards net zero,” said Renaud Guidée , NZIA Chair and Group Chief Risk Officer at AXA.
The Protocol builds on the launch of the first-ever global accounting standard to measure greenhouse gas emissions associated with insurance underwriting portfolios (“insurance-associated emissions”) developed by the Partnership for Carbon Accounting Financials (PCAF) in collaboration with the NZIA.
“Climate change is one of the biggest challenges we face as a global society and re/insurers play their part in the transition to a low carbon economy. Setting targets to decarbonise re/insurance portfolios is therefore a crucial step forward, serving as a north star on the path to net zero,” said Thierry Léger, Group Chief Underwriting Officer, Swiss Re, whose organisation leads the NZIA Target-Setting Working Group.
The Protocol outlines five target types within three target categories (i.e. two types within the emissions reduction category, two types within the engagement category, and one for the re/insuring the transition category). Existing NZIA members will be required to set at least one of the five target types by 31 July 2023, and at least one target type in each of the three target categories by 31 July 2024. Those joining the Alliance after January 2023 will have six months to set their first target and one year after that to set a target type in each of the three target categories.
“The launch of the Protocol signals the move from commitment to implementation. Now is the time for insurers to set ambitious and credible science-based decarbonisation targets for their respective insurance portfolios and support a just transition to a net-zero emissions economy to avert climate catastrophe and ensure a sustainable future,” said Butch Bacani, who leads UNEP’s Principles for Sustainable Insurance Initiative, which created the NZIA last year.
The NZIA also recently announced that the Alliance will continue to collaborate with the Science Based Targets Initiative (SBTi) on the development of its approach to target-setting for insurance and reinsurance underwriting portfolios in line with SBTi’s upcoming Financial Institution Net-Zero Standard (FINZ).
Please click here to download the launch release
Please click here to download Version 1.0 of the NZIA Target-Setting Protocol
Quotes from the CEOs of the member companies
“Our purpose is ‘Sustainable Living. Together.’ For us this means, an inclusive society in which everyone participates in a way that can sustain for many generations to come. Climate change is one of the most critical developments of our time. At Achmea, we are committed to contribute to achieving the global climate goals by transitioning our investment and insurance underwriting portfolios to net-zero emissions by 2050. As a member of the NZIA, we are proud of the Target Setting Protocol launched today and will be working on setting and disclosing our targets in the coming months.” Bianca Tetteroo, CEO, Achmea
“ The methodologies developed by the NZIA over the past 18 months, as well as the Target-Setting Protocol that is being announced today, are essential to enable us to take the next step in complying with the promise we have made by signing the NZIA commitment: reducing the footprint of our insurance associated emissions towards net-zero by 2050. The methodologies make it possible to measure insured emissions. In addition, the Protocol provides guidance in setting our targets. With the nearly 30 international (re)insurers that have made the commitment to the NZIA, we will each work towards an emission-neutral economy from our own portfolio’s. ” Jos Baeten, CEO, ASR Nederland
“As a founding member of the NZIA we are delighted to have contributed to the development of the Target-Setting Protocol. Setting science-based targets is crucial in the fight against Climate Change as they bring accountability to the emissions reductions that insurers need to achieve to hit Net Zero. In 2022 near-term targets for our operations and investments were validated by the SBTi and Aviva will set further targets for our underwriting activities following the publication of this new protocol.” Adam Winslow, CEO, Aviva
“ We are very proud to be among the pioneers in the fight against climate change in the insurance industry. The NZIA’s Target-Setting Protocol will push all of us to be even more ambitious .” Thomas Buberl, CEO, AXA
“ No single company can overcome the climate crisis alone. It must be a global effort and our sector, a pillar of every successful economy, has a key role to play. Today’s milestone is a clear commitment from insurers and reinsurers across the globe as we turn from aspiration into clear goal-setting. It was my honour to launch the UN-Convened Net-Zero Insurance Alliance eighteen months ago at the G20 Climate Summit in Venice. This alliance represents around 15% of global premiums and is ready to scale and speed up the insurance industry’s contribution to a greener and more inclusive economy. ” Philippe Donnet, CEO, Generali
“ Fighting climate change remains an urgent task and we will achieve the best results by teaming up as an industry. Therefore I’m very glad that with the first NZIA Target-Setting Protocol, insurers and reinsurers are taking another major step together to support the transition to a climate-friendly economy. At Hannover Re, we remain fully committed to contributing our part. ” Jean-Jacques Henchoz, CEO, Hannover Re
“As a Net Zero Insurance Alliance member, we are proud to be associated with this historic launch of the Target Setting Protocol. We recognize the need to set science-based targets that will keep us on track with our transition plans towards reducing greenhouse gas (GHG) emissions.This protocol sets us on the right path. In this regard, we affirm our commitment towards galvanizing action that will avert the impacts of climate change.” Philip Lopokoiyit, CEO, ICEA LION Insurance Holdings & General Insurance
“ This is an important step towards a sound framework for insurance-associated emissions accounting and target setting. We are proud to offer our contribution as insurers in building an actionable and tangible path to a net zero economy that also support a just transition process. ” N.M. Fioravanti, CEO, Intesa Sanpaolo Vita Insurance Group
“ Economic decarbonization is essential for the planet. Our environmental commitment is to gradually and progressively raise the bar on sustainability, with specific objectives set down for 2023 that contribute to the reduction of greenhouse gas emissions from our insurance and reinsurance portfolio, and which facilitate us in accompanying society in a just transition, helping both our clients and those people whose livelihoods are intertwined with carbon-related activity to also converge in that direction .” Antonio Huertas, CEO, MAPFRE
“ Our business is a protection business. It is also our duty to score up our insurance portfolios on a path that respects the Paris Agreement on Climate Change. It is not an easy task but a necessary one .” Nicolas Gomart, CEO and Vice-chairman, Matmut
“ Clear targets are an integral part of Munich Re’s climate strategy. We support the NZIA’s leading role in setting a common framework for climate targets in the insurance industry which underlines the role of insurers as enablers of a sustainable transition .” Joachim Wenning, CEO, Munich Re
“The NZIA’s Target-Setting Protocol is an important step towards net-zero target-setting for insurance underwriting. It underscores how our industry, through joint action, can play a key role in enabling the transition towards a low-carbon economy.” David Knibbe, CEO NN Group
“ QBE is pleased that the significant milestone of launching the target setting protocol has been reached and we look forward to continuing to support this important work .” Andrew Horton, CEO, QBE Insurance
“ As a founding member of the NZIA, we are particularly delighted to have contributed to the development of this first Target-Setting Protocol. Setting high standards for a just transition is key for our industry to fight against Climate Change. SCOR will set science-based targets for its underwriting activities and move ahead on its journey to achieve Net Zero. ” Laurent Rousseau, CEO, SCOR
“ A successful transition to net-zero largely depends on action by companies. Insurers have the knowledge and tools to support them in this transition and to help businesses mitigate and adapt to the physical consequences of a warming planet. The initial Target-Setting Protocol enables Zurich to build on our existing commitments, transparently communicate the Group’s path to net-zero in insurance and work with our customers to meet their own targets. ” Mario Greco, CEO, Zurich Insurance Group