Activists suggest PCAF-NZIA protocol violates Race to Net Zero recommendations
Activists from the WWF and Insure Our Future campaigns have said that the Platform for Carbon Accounting Financials and the Net-Zero Insurance Alliance protocol violates the Race to Net Zero and UNHLEG recommendations.
These statements came soon after the PCAF and the NZIA published their long-awaited Greenhouse Gas Accounting and Reporting Standard for the insurance industry.
Under the minimum criteria of the UN Race to Zero campaign, NZIA members must set targets reflecting “a fair share of the 50% global reduction in CO2 by 2030… Including scopes 1, 2 and 3 for businesses and… for financial entities, including all portfolio/financed/facilitated/insured emissions.”
The new protocol was set out to define how insurers will reach this aim by laying the standard for how they measure and disclose insured emissions.
Though, according to Peter Bosshard of Insure Our Future, “The PCAF protocol opens the door for greenwashing and will allow insurers to continue business as usual in underwriting the expansion of the oil and gas industry.
“the protocol’s fatal flaw is its rejection of mandatory disclosure of the Scope 3 emissions of insurers’ customers.
As a result, insurers will be able to decorate themselves with the PCAF seal of approval even if they only measure the operational emissions of the fossil fuel producers they insure and not the much larger emissions of the fossil fuels themselves.”
At the launch of the recommendations, UN Secretary General Antonio Guterres, stated, “By the first half of 2023, all existing net-zero voluntary initiatives must explain how they will align and revise their standards accordingly,” adding that, “So-called ‘net-zero pledges’ that exclude core products and activities are poisoning our planet… The sham must end.”
Bosshard suggests that excluding core products and activities is precisely what the PCAF protocol does by omitting Scope 3 emissions.
He adds that this is also inconsistent with evolving regulations such as the EU’s sustainable financial disclosure regulations (SDFR) and the US Security Exchange Commission’s climate disclosure proposal.
Regula Hess, Sustainable Finance Expert at WWF Switzerland, said, “Insurance companies can contribute importantly to halting climate change, e.g. by refusing to insure new oil and gas fields or by requiring climate standards for infrastructure and buildings.
“Yet, industry-led initiatives such as PCAF and NZIA are understating their responsibility undermining the credibility of these coalitions. It is time now for the coalitions to trim their membership to companies with science-based climate ambitions.”
Peter Bosshard concluded, “The failure of PCAF and NZIA to come up with a credible insured emissions protocol confirms the conclusion of the UN Expert Group that voluntary initiatives and guidelines are insufficient.
“It’s time for regulators to step in and mandate credible emissions reporting and net zero targets that cover all sources of emissions.”
Source: Reinsurance News, https://www.reinsurancene.ws/activists-suggest-pcaf-nzia-protocol-violates-race-to-net-zero-recommendations/