The Church of England Pensions Board (CEPB) has left Net-Zero Asset Owner Alliance (NZAO). It is the third departure from the asset-owner group, which stayed strong despite many of its insurer members being namechecked in a recent letter from Attorneys General.

According to the NZAO’s website, CBUS withdrew from the Alliance in September 2022 and HanseMerkur on 19 May 2023.

In May, the attorneys wrote a letter to members of the Net-Zero Insurance Alliance (NZIA) raising concerns about the legality of their commitments to collaborate with other insurers and asset owners to “advance an activists climate agenda”.

Following the letter, the NZIA group crumbled as many members announced their exit from the initiative, but the group now plans to loosen its rules, including extending the deadline for publishing emissions targets, in an attempt to create space for former NZIA members to rejoin.

The departures from NZIA in recent weeks have raised questions about the future of climate groups and their parent, the Glasgow Financial Alliance for Net Zero (GFANZ).

It is not the first time that one of GFANZ’s subgroups has faced questions over the legality of its ambitions. Last summer, it was the banking group that looked like it was on shaky ground when a number of its biggest names threatened to quit over concerns they would be sued for agreeing to phase out fossil fuels as part of updated rules.

But despite the turmoil of a few months that faced the NZIA group, the NZAO stayed strong with members committed to membership until the CEPB departed from the alliance this morning.

In a statement confirming the departure, Laura Hills, the CEPB’s director of climate and environment, said: “The Church of England Pensions Board has regretfully decided to leave the UN-convened NZAO.

She noted that the board would remain committed to achieving its net-zero target and would continue to share NZAO’s objectives. She added: “The Pensions Board is an active founding member of the Net Zero Investment Framework and continues to co-chair the Paris Aligned Asset Owners Steering Committee.”

However, Hills stated: “Given the size of the organisation, a clear focus on one initiative was needed. The Pensions Board and the NZAOA are committed to continuing to collaborate on engagement topics and will stay in close contact with a shared purpose of achieving net-zero emissions.”

Hills added that the Church Commissioners for England remain members of the NZAO.

An NZAOA spokesperson said that the departure of the CEPB comes after an asset owner joined in June – Spain’s Caixa 30 – and that another new member based in South Africa would be announced next week.

IPE has contacted NZIA for comment.

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