German insurer Munich Re has pulled out of the Net Zero Asset Owners Alliance (NZAOA), Climate Action 100+, and the Net Zero Asset Managers initiative. Its asset manager is also no longer a member of the Institutional Investors Group on Climate Change.
In a statement last week, the company cited increasing legal and regulatory ambiguity, “potentially resulting in conflicting regulatory requirements and related legal uncertainty”.
It added that “climate-related disclosures and associated administrative requirements have become very complex for international corporations in general, also due to heterogeneous regulations and differing memberships” and that they were “disproportionate to the impact achieved in terms of climate protection”.
The insurer said it will continue to contribute to climate protection (Klima Schutz, in German) independently and that it will be able to pursue its targets “in a more focused and targeted manner on our own”.
The NZAOA used to not comment on individual members’ decisions, but has recently changed its policy and a spokesperson told IPE that Munich Re had informed the group of its decision to withdraw, “emphasising that its climate commitments, aligned with the Alliance’s requirements and Target-Setting Protocol, remain unchanged.
“We want to take this opportunity to thank Munich Re for the productive and constructive partnership we’ve shared over the past five years,” the spokesperson added. “NZAOA membership is entirely voluntary, and each member retains the independence to make decisions that best align with their portfolios and objectives.”
Munich Re is the fourth NZAOA member to quit the alliance since the Church of England Pensions Board did so in July 2023. Denmark’s PKA left in September 2024 and Australian insurer QBE in March this year.
Last month, the Canada Pension Plan Investment Board revealed its decision to ditch its commitment to net zero, implying that it had been driven in part by domestic legal changes requiring entities to prove the environmental claims they make.
However, it also said that “forcing alignment with rigid milestones could lead to investment decisions that are misaligned with our investment strategy”.
Appetite for climate investing has fallen across the board, but very sharply among North American investors, according to a Robeco survey. In Asia-Pacific, a majority of European investors continue to prioritise climate investing, even though support has declined somewhat.
Common to investors in all regions, however, the survey indicates, is a dwindling belief that the goal of the Paris Agreement to keep the global temperature rise below two degrees can be accomplished. Some 44% of respondents now think this target is out of reach, while only 31% believe it can still be achieved.
The temperature rise goal is linked to a requirement in the accord that all countries work to achieve net-zero emissions in the second half of this century. According to a paper from EDHEC Climate Institute, there is an estimated 35–40% chance that global temperatures will exceed 3°C.
Items to note:
- There’s still time to register for IPE’s Transition Conference & Awards 2024, which is taking place next week, on 17 June at the Cardo Brussels, Autograph Collection in Belgium
Susanna Rust
ESG Editor
This news briefing was published earlier in the week. If you would like to receive it regularly, on your ‘IPE profile’, go to ‘My Newsletters ‘ and select any from the list.
This article was updated after publication to include the names of other asset owners who have left the NZAOA.
