Zurich Insurance has become the latest in a string of financial institutions to leave the Glasgow Financial Alliance for Net-Zero (GFANZ), a coalition of organizations working to achieve net-zero greenhouse gas emissions by 2050. Zurich’s withdrawal from the Net-Zero Insurance Alliance (NZIA) follows Munich Re’s departure from the group last Friday. Several other prominent institutions, including Vanguard and GLS Bank, have also left GFANZ initiatives over the past few months, citing a variety of reasons, such as fear of antitrust lawsuits and frustration over inaction by other members.
Founded in 2021, GFANZ grew out of the 26th United Nations Climate Change Conference in Glasgow, Scotland. The organization has faced opposition from some fossil fuel interests due to its goal of achieving net-zero emissions. However, some members have expressed dissatisfaction with the group’s targets for reducing emissions, which they view as too aggressive.
The recent departures of Munich Re and Zurich Insurance from the NZIA, of which they were founding members, have raised concerns about antitrust lawsuits. Zurich, for its part, stated that it had developed its own methodology for measuring and disclosing greenhouse gas emissions, which it would use to help customers reduce their emissions.
GFANZ’s Net-Zero Banking Alliance (NZBA) has also faced discord among members. In October 2021, some banks complained that the targets for lowering emissions were too aggressive. By February 2022, GLS Bank had left the NZBA, citing other members’ reluctance to stop funding new oil and gas development.
In response to these issues, climate activists have been taking action. In February, ShareAction petitioned several banks, including Barclays and Deutsche Bank, to stop funding new oil and gas projects by the end of the year. Barclays has since announced changes to its policy on funding tar sand oil production, stating that it will not fund new tar sand projects as of July, but it will provide transitional funding to companies working to lower their emissions.
Vanguard’s departure from the Net-Zero Asset Managers initiative (NZAM) has also faced criticism from activists. Vanguard S.O.S., an activist group targeting the $8 trillion asset manager, launched a YouTube ad campaign warning of the financial risks of investing without considering the environmental impact. The group also launched a letter-writing campaign linking Vanguard’s fiduciary responsibilities to climate risk, which resulted in 1,400 letters being sent to the company. Vanguard is one of the world’s biggest investors in oil and fossil fuels, according to Vanguard S.O.S.
The recent departures from GFANZ have raised concerns about the coalition’s ability to achieve its net-zero emissions goals. However, some members remain committed to the cause and are working towards their targets.