The Partnership for Carbon Accounting Financials (PCAF) has collaborated with the UN-convened Net-Zero Insurance Alliance (NZIA) to launch a working group tasked with developing the first global standard to measure and disclose insured greenhouse gas emissions.
With representatives including PCAF insurance signatories, founding NZIA members, and other re/insurers, the PCAF Insured Emissions Working Group hopes the standard will “give insurers deeper insight into the risk profile of their respective underwriting portfolios, stimulate innovative approaches to decarbonisation, and create comparability for stakeholders”.
PCAF, which seeks to develop methods to assess the climate impact of lending books and investments, was initiated by ASN Bank in 2015 and launched globally in 2019. It currently stands at 149 members.
More recently established, the NZIA was announced at the G20 Climate Summit in Venice in July by its founding members: AXA, Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group. Signatories commit to transition their insurance and reinsurance underwriting portfolios to Net Zero greenhouse gas emissions by 2050.
Work on an Insured Emissions Standard will begin immediately and will be led by the PCAF Secretariat and consultancy firm Guidehouse. The final standard will be published by PCAF.
Developing the standard will occur in accordance with competition laws and other applicable laws and regulations. This may include “consultation with appropriate competition and other authorities on how these standards and methodologies can be implemented”.
The Group has also said it welcomes other key stakeholders to join.
In other insurance news, last week the US Department of the Treasury’s Federal Insurance Office (FIO) joined the UN-convened Sustainable Insurance Forum (SIF). The SIF is a network of 31 insurance supervisors, regulators and authorities working to strengthen responses to sustainability and climate change challenges facing the sector.
The FIO joining the Forum came just days after it issued a Request for Information on the insurance sector and climate-related financial risk. It is asking for comments to be submitted by 15 November.