LONDON, March 31 (Reuters) – A member of a United
Nations-backed coalition of insurance firms and pension funds
seeking to tackle climate change told Reuters it was considering
quitting after disagreements about curbing investment in the oil
and gas sector split the group.
Danish pension fund AkademikerPension may leave the Net Zero
Asset Owner Alliance because new requirements detailed in a
position paper for its 85 members do not attach enough strings
to owning the shares and bonds of publicly listed oil and gas
companies, its chief investment officer, Anders Schelde, said.
“The position doesn’t live up to our standards and we will
have to consider our involvement in NZAOA moving forward,”
Schelde said, referring to the final draft of the paper after an
18-month consultation process.
Hopes for more ambitious requirements were dashed by
concerns among some of the coalition’s members that prescriptive
goals could open them up to allegations that their industry was
colluding and attract antitrust lawsuits, according to people
familiar with the deliberations.
The row is the latest in a string of policy splits among
major climate coalitions of financial firms.
The Glasgow Financial Alliance for Net Zero (GFANZ), led by
former Bank of England governor Mark Carney, dropped in October
a requirement for its members to sign up to a United Nations
emissions reduction campaign after some pushed back.
Reuters reported last week that members of the Partnership
for Carbon Accounting Financials were divided over how to report
on carbon emissions linked to their capital markets business.
In the position paper published on Wednesday, NZAOA, whose
members control $11 trillion in assets, said it expected members
to no longer finance new oil and gas infrastructure linked to
exploration and production projects directly.
AkademikerPension said it wanted the position paper to state
that NZAOA members should invest in public equities or corporate
bonds only when the companies involved are no longer investing
in exploration for new oil and gas.
“We’re not saying all NZAOA members should dump listed
equities of oil majors from tomorrow, but it should be a clear
aim and clear position that new oil and gas is incompatible with
1.5 degrees,” said Schelde, referring to efforts to cap global
warming at that level by mid-century.
Dorris Kirui, senior environmental, social and governance
manager at Gothaer Asset Management AG, a NZAOA member, said she
supported the position paper but acknowledged its language was
not as strict as some members wanted.
“As NZAOA have an increasing number of members from
different countries and political backgrounds, it was difficult
to achieve consensus on the exact wording,” Kirui said.
Gunther Thallinger, NZAOA chair and a board director at
German insurer Allianz SE, said the group’s position
reflected a “a minimum standard” that all members could agree
on.
ANTITRUST FEARS
Several NZAOA members are based in the United States, where
some states run by Republican politicians have criticized and
even boycotted financial firms for their stance on fossil fuels
and the transition to a low-carbon economy.
This has created anxiety among some firms about the risks
they face should they become the target of antitrust lawsuits
over their participation in environmental initiatives, despite
no such legal action having been mounted yet.
German insurer Munich Re said earlier on Friday
it was withdrawing from another alliance of insurers focused on
reducing carbon emissions – the Net-Zero Insurance Alliance – to
avoid antitrust risks.
A Munich Re spokesperson said the insurer planned to stick
with NZAOA, without elaborating why it was not as concerned
about the antitrust risks in that instance.
Joel Mitnick, a partner at law firm Cadwalader, Wickersham &
Taft LLP in New York, said antitrust lawsuits against firms
participating in climate coalitions were possible but unlikely
to succeed.
“I think it’s going to be extremely difficult for a
plaintiff, even a government enforcer, to prevail on an
antitrust theory of harm,” said Mitnick.
(Reporting by Virginia Furness in London Additional reporting
by Simon Jessop in London and Isla Binnie in New York; Editing
by Greg Roumeliotis and Matthew Lewis)
