Australian insurer QBE has announced its withdrawal from the Net-Zero Asset Owner Alliance (NZAOA) following the successful achievement of its 2025 interim targets, which were set as part of its membership commitment.
In a statement, QBE explained that its approach to reaching “net zero investments by 2050” would now be integrated into a broader climate transition plan, which the company plans to release in 2026. The insurer emphasized that it would continue working with stakeholders to advance its sustainability strategy moving forward.
This move follows a series of notable exits from other climate-focused initiatives, including the Net-Zero Banking Alliance and the Net-Zero Asset Managers (NZAM) initiative. Both alliances are currently engaging with their members to reassess strategic priorities in light of recent departures. NZAM, in particular, has paused most of its activities amid a review, and last week, JP Morgan Asset Management joined the list of US-based members exiting the initiative. In a statement, JP Morgan Asset Management noted that NZAM had suspended operations due to evolving regulatory environments and shifting client expectations.
The NZAOA requires its members to transition their investment portfolios to net-zero greenhouse gas emissions by 2050, in line with the goal of limiting global warming to 1.5°C. Members are also tasked with updating their interim targets every five years.
QBE, which joined the NZAOA in 2020, initially set interim targets for 2025, in alignment with the alliance’s framework. In its 2022 sustainability report, QBE highlighted the investments it made in data, systems, and personnel to meet these targets. The insurer set goals to reduce carbon intensity by 25 percent in its equity portfolio’s Scope 1 and 2 emissions by 2025, engage with the highest 20 emitters in its investment-grade portfolio, and allocate 5 percent of its assets under management (AUM) to climate solutions by 2025.
A QBE spokesperson confirmed that the insurer had refined its engagement approach in 2024, tailoring its inquiries to individual issuers based on their public disclosures. The engagement aimed to understand emission reduction targets and the preparedness of portfolio companies for upcoming climate-related disclosures, such as the International Financial Reporting Standards (IFRS) S2.
QBE also confirmed that it had met its 2025 targets, which will be included in NZAOA’s forthcoming progress report. As of 2024, 6 percent of QBE’s investment portfolio is allocated to climate solutions. The company has also engaged all its external fund managers and the 20 highest emitters in its portfolio, achieving a 44 percent reduction in Scope 1 and 2 emissions since 2019.
Despite its departure from the NZAOA, QBE reiterated its commitment to sustainability, emphasizing that its focus on transitioning its investment portfolio to net-zero emissions by 2050 remains unchanged. The exit marks the sixth departure from the initiative since its inception in 2019. NZAOA has declined to comment on QBE’s exit.
Notable exits from the NZAOA include Dutch pension fund Pensioenfonds Detailhandel earlier this year, Danish pension fund PKA in September, and Australian super fund CBUS in 2022. Other departures include German insurer HanseMerkur in May 2023 and the Church of England Pensions Board in June 2023.
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