Businesses need standards to deliver climate clarity says Lloyd’s chief

The chairman of Lloyd’s has called for a standardised climate and ESG reporting system as the chair of BeyondNetZero warned global spending in sustainability needs to increase fourfold.

Bruce Carnegie-Brown was speaking during a panel session on climate at City Week, hosted by City & Financial Global, in London’s Guildhall.

He was asked about the challenges around the measurement of companies’ climate efforts and said there remained a huge complexity around the issue.

“It needs to be based in the science, but the science is not perfect at present with scientists still debating the impact of various aspects,” he explained. “However, what we cannot do is allow perfect to get in the way of progress.

“Whatever we create its has to be  something that is capable of being accessed and understood by the man in the street as government and business need to have the support of the public if it is to succeed.

“A traffic light system might be a good idea.”

Carnegie-Brown added while the onus was on helping businesses to measure their success there also needed to be an effort to identify and call out those who were looking to manipulate the data to in effect greenwash their performance.

“Calling out the bad actors is just as important,” he said.

Turning to the insurance sector and the wider financial services industry Carnegie-Brown said the current practices were only further muddying the waters when it came to climate performance.

“It is not helpful if every insurer or broker is  putting out a different form to their clients to look to assess their climate and ESG performance,” he explained. “Creating a standard which can be used across financial services, which is clear – it does not need to be 70 pages long – and measurable would be a start.”

Lord Brown of Madingley, chair of BeyondNetZero used the panel to urge businesses and governments to rapidly increase the level of investment into sustainability and energy transformation.

Looking at the results of the COP27 meeting in Egypt Brown said there was still a mistrust among some.

“There is not trust from the global south toward us due to the lack of delivery on past promises,” he explained.

Brown said the world had to address the level of investment which is currently being undertaken.

“We need a lot of investment. In terms of current levels investment in energy and industry is around $1 trillion. We should be investing $4 trillion, not in the long term  but today. It is not just a question of investment levels but also about speed.”

Brown said there needed to be clear incentives for investing in sustainability.

“At present the incentives are ineffective to attract capital.”

He added that there needed to be a range of incentives which were in offer and would need to have the ability to adapt to localised challenges and business cultures.

“Private companies are vital to success,” Brown continued. “Private companies understand  how to deliver things, governments generally don’t.

“For industry as a whole we need to create incentives to manage carbon. It is the most important issue we face. We need to keep pushing to get this done.

“Lots of things are happening but not enough. We need to increase investment fourfold as I have already stated.”

He added that while investment in clearly sustainable operations has to increase the world needs to ensure that the wider systems are also in place.

“There is no point in incentivising offshore wind farms if you cannot connect them to the grid when you need electricity,” he explained. “We need to deliver the systems to get things done.”