The Private Sector and Governments Must Take Risks in Climate Action

What do you take away from the recent IPCC Working Group 1’s report?

The report has been described by the UN Secretary-General as a code red for humanity, and we could not agree more on the urgency of the situation. Every region faces an increasing impact from climate change, many of the observed changes are unprecedented (and may even be irreversible), and human influence is unequivocal, with more definitive evidence than ever. Since the Paris agreement in 2015, awareness of the climate crisis has increased, but we must continue to act. Current nationally determined contributions (NDCs) take us to a world that is 2.7°C warmer by the end of the century. Drastic cuts in emissions are necessary to reach net-zero by 2050 and to maintain a livable climate through the end of the century.

What is AXA doing to contribute to climate change mitigation?

The insurance industry is uniquely poised to support the transition towards a resilient, net-zero emissions economy, and should use all available levers to do so. At AXA, we believe that a holistic approach to carbon neutrality is key, tackling net zero across both the liability and asset sides of our balance sheet. This way, we can deliver impact on climate not only through our investment decisions, but also through our underwriting actions. In 2019, we joined the UNEP-FI sponsored Net-Zero Asset Owner Alliance (NZAOA) to align our investment portfolio with a net-zero trajectory by 2050. This led us to set an intermediary target to decrease the carbon footprint of AXA’s general account assets by 20% by 2025. We are now going one step further with the creation of the Net-Zero Insurance Alliance (NZIA), which focuses on the other side of our balance sheet.

Can you tell us more about the Net-Zero Insurance Alliance?

AXA has made a lot of progress on the investment side. For instance, we doubled our green investment objective, launched a new type of bonds – transition bonds –, and issued our first green bonds. Beyond such achievements, we need to accelerate on all fronts, as we are going through a decade that will prove defining in the fight against climate change. Investments are a welcome first step but they have to be complemented through the insurance coverage we provide. That is why, in December 2020, AXA called for the creation of the Net-Zero Insurance Alliance (NZIA). Like the NZAOA, the NZIA extends carbon neutrality commitments to the insurance business. This AXA-chaired international coalition brings together 7 other major insurers and reinsurers. Our objective is to establish a target-setting protocol enable to NZIA members to individually align insurance portfolios with the Paris Agreement trajectory. The NZIA is also part of the Glasgow Financial Alliance for Net-Zero, which gathers the main initiatives aimed at accelerating the transition of the financial sector and global economy towards a net zero emission objective.