Reinsurance giant cites potential for antitrust risks as it commits to pursuing decarbonisation goals on its own
Munich Re has announced it is discontinuing its membership in the Net-Zero Insurance Alliance (NZIA).
“In our view, the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited that it is more effective to pursue our climate ambition to reduce global warming individually,” says Joachim Wenning, CEO of Munich Re.
In a statement, Munich Re said it had ambitious climate targets, including:
- Reducing GHG emissions related to the investment portfolio by 29% by the end of 2025, and thereafter successively brought down to net zero by 2050
- As for the exploration and production of oil and natural gas (primary insurance, direct and facultative reinsurance), Munich Re will be reducing its climate-related industry exposure in such a way that there will be no associated net GHG emissions by 2050. In a first step, we aim to reduce emissions by 5% by 2025. As of April 2023, Munich Re will not insure projects involving new oil and gas fields or new midstream oil infrastructure. At the same time, Munich Re will reduce thermal-coal-related exposure in its direct and facultative insurance business by 35% Group-wide by 2025, before eliminating this exposure altogether by 2040. Since 2018, we have stopped insuring new coal-fired plants, coal mines and since 2019 oil sand mines.
- Regarding the emissions from its own operations, Munich Re has been carbon-neutral since 2015 and previously reduced CO2 emissions per employee by 44% from 2009 to 2019. Current GHG emissions are to be reduced by a further 12% per employee by 2025. By 2030, Munich Re expects to achieve net-zero GHG emissions in its operations.
“Our climate commitment is unwavering,” added Wenning. ”We follow scientific recommendations. To date we are decarbonising even faster than what is required to reach net zero by 2050.”
Speaking in Davos in January, Thierry Léger, group chief underwriting officer, Swiss Re, whose organisation leads the NZIA Target-Setting Working Group, said climate change was “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,” he added.