As the spotlight on woke corporations and other private American entities continues to intensify, a group of state attorneys general is warning insurance companies that their participation in "net-zero" alliances — pacts that require a commitment to action toward realizing facets of the Paris climate agreement — could amount to antitrust violations.
Led by Utah Attorney General Sean Reyes and Louisiana Attorney General Jeff Landry, a letter making the case against insurers pursuing the left's energy "transition" was signed by 21 additional state AGs and sent to 28 insurance companies that proclaim membership in the United Nations-convened Net-Zero Insurance Alliance (NZIA) and Net-Zero Asset Owner Alliance (NZAOA).
The letter explains how these net-zero alliances are "working to implement the Paris Agreement's climate change goals through the financial system, including the insurance industry," meaning their members use their influence and billions of dollars in assets and funds to "transition insurance and reinsurance underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050" by forcing "clients to reduce their emissions."
More on the climate pacts' strong-arm requirements for members from the AG's letter (embedded in full below):
Specifically, the NZIA protocol requires you to adopt one of the NZIA’s defined climate targets by this summer, and requires you to commit to three of them by next summer. These targets are anything but aspirational—they require you to take specific courses of actions over the next two decades. For example, meeting NZIA’s “emissions reduction target” means choosing either an overarching insurance-associated emissions reduction target of 34-60% by 2030, or targeting emissions on a sector-by-sector basis in line with a net zero pathway for that sector. Under either target, you are required to pressure clients who work in an environmentally “dirty” industry to progressively decarbonize their business practices. Further, to meet NZIA’s “engagement target,” you must either try to increase the share of your clients who have set their “own science-based [net-zero] targets” to 100% by 2040, or you must actively pressure “selected clients” to adopt and implement their own climate “transition plans and decarbonisation strategies.”13 On this second “engagement” option, the protocol includes examples like “supporting [personal motor vehicle insurance clients] in their efforts” to go green “by transitioning to electric vehicles; [using] other forms of low or zero-emission transportation; [and] reduc[ing their] vehicle use.” Finally, to meet NZIA’s “insuring the transition target,” you must progressively increase the proportion of your business that insures “climate solutions,” such as mitigation or adaption activities.
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For reasons stemming from this collective goal being pursued by insurer members of net-zero alliances, the state attorneys general explain that they "have serious concerns about whether these numerous requirements square with federal law, as well as the laws of our states, as they apply to private actors."
"Under our nation’s antitrust laws and their state equivalents, it is well-established that certain arrangements among business competitors are strictly forbidden because they are unfair or unreasonably harmful to competition," the attorneys general remind insurers:
For example, “an agreement among competitors not to do business with targeted individuals or businesses may be an illegal boycott, especially if the group of competitors working together has market power.” Likewise, collective agreements to fix prices or “restrict production, sales, or output” are illegal. This restriction extends to agreements among competitors to issue uniform pricing policies, conditions of sale, production quotas, or otherwise limit the identity of their customers if those agreements will ultimately raise prices."
The NZIA protocol’s “targets” and requirements appear to violate these well-established laws. To start, several of the “targets” put conditions on the terms of your insurance contracts. For instance, two of the “emissions reduction targets” and “engagement targets” require your customers to meet certain environmental conditions to remain customers. Namely, customers must reduce their GHG emissions in line with net-zero and adopt “science-based [climate] targets.” These conditions are problematic for two reasons. First, NZIA members have a substantial stake in the insurance industry and the ability to wield market power. In other words, the conditions that your companies collectively place on your insurance contracts can radically influence the entire industry. Second, these conditions threaten to dramatically increase prices, as reducing emissions and implementing climate plans typically involve decreasing output and production and/or substantially increasing costs across the value chain and, particularly, in the oil, gas, energy, and transportation sectors. These increased costs result in increased prices for consumers and in inflation.
The case made by the attorneys general is prudent and likely to bring results, explained Will Hild, the executive director of Consumers' Research. "This action taken by state attorneys general will likely uncover antitrust violations and collusion from members of NZIA and NZAOA and is another step in protecting consumers from the sham that is ESG," he said. "These Net Zero alliances are nothing more than a nefarious tool to use the threat of losing insurance to force companies to align with a Leftist agenda," Hild explained.
What's more, the AGs note that even founding members of the NZIA — including Zurich Insurance Group and Munich Re — have since withdrawn their membership, with the latter citing concerns about being able to achieve the alliance's goals without "exposing" the company to "material antitrust risks."
“I am concerned the Net Zero Insurance Alliance is stifling competition in Louisiana and driving up insurance costs for our consumers," remarked Louisiana Attorney General Landry in a statement provided to Townhall. "We are investigating if their actions violate our antitrust and consumer protection laws," he added. "I will continue to defend Louisiana consumers and our State’s economy from private woke imperialism. We will work tirelessly to ensure our people’s hard-earned money is not used to fund the desires of climate control charlatans," AG Landry pledged.
Utah Attorney General Reyes also noted in a statement how the "ESG movement has spread to every corner of the world’s financial and energy sectors, and unsuspecting Americans are paying the price." He reminded that "insurers have an obligation to protect the interests of their clients, not advance a radical environmental agenda."
This latest move in the fight to protect investors, customers, and the broader economy from leftist policies comes less than one week after a group of state attorneys general put BlackRock — the world's largest asset manager — on notice that its participation in "net-zero" climate alliances should make it ineligible for blanket authorization from the Federal Energy Regulatory Commission to buy large quantities of stock in utility companies.
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