Climate groups urge insurance market to act not talk

Climate campaigners have said the announcement that Lloyd’s is to consult on how it will undergo its journey towards a net zero future is not brave enough.

Reclaim Finance and Insure our Future have criticised the new consultation on Lloyd’s ESG roadmap, saying it was time for action, not consultation.

On Thursday Lloyd’s said it had launched a consultation around how the market would move to a more net zero operation which included the risks it underwrote and the investment it made.

Lloyd’s added the roadmap had been designed to support market participants in “evolving and embedding” their own sustainability strategies, including navigating evolving regulatory reporting requirements. It also aims to provide greater clarity to all stakeholders on how Lloyd’s will support customers as they respond to a volatile macro-environment, while maintaining decarbonisation and transition progress to support global ambitions to achieve net zero.

It added the document sets out planned oversight processes and regulatory expectations on climate-related risk management, capital and reserving as well as transition planning. It seeks to provide short-term actionable steps that can be taken, focusing on the areas that matter. The plan will be developed and iterated in response to consultation feedback, and for future years to ensure it remains in line with government policy and regulatory requirements.

Lloyd’s CEO, John Neal explained: “We hope that in setting out this consultation, the market will have greater clarity on the approach the Corporation is planning to implement, to support our customers in facing the challenges of transitioning to lower carbon business models. Our aim is to give our market participants greater confidence in setting, embedding, and operationalising their own individual climate strategies, through the transition and beyond.”

However, climate campaigners were not impressed.

Ariel Le Bourdonnec, insurance campaigner at Reclaim Finance responded to the announcement by saying: “Lloyds of London claims it wants to support a just transition, but behind the new narrative, it’s the same old story. Lloyd’s only seeks to calculate the impact of climate change on its business, without thinking about the impact of its business on climate change.

“The IPCC made it very clear that emissions must peak by 2025, yet Lloyds of London’s consultative roadmap will take us beyond this deadline. Our society and our planet does not need another consultation but real action. Lloyd’s of London is the insurance hub for the fossil fuel industry, yet just two of the top 20 Lloyds agents have committed to stop covering new oil and gas fields.”

Her view was backed by Lindsay Keenan, EU Coordinator, Insure Our Future.

He said: :“This planned consultation demonstrates how risk averse Lloyd’s is, not how brave. It reads like a complete avoidance of any responsibility by Lloyd’s for its members actions in insuring fossil fuels and therefore like a complete avoidance of its own responsibility for managing the Society of Lloyd’s members. It reads like one long sustainability get-out clause that allows Lloyd’s and its members to do whatever they please, or not, so long as they make a profit. It feels very irresponsible. Insure Our Future will respond in more detail in due course.”

Lloyd’s added the roadmap had been designed to support market participants in “evolving and embedding” their own sustainability strategies, including navigating evolving regulatory reporting requirements. It also aims to provide greater clarity to all stakeholders on how Lloyd’s will support customers as they respond to a volatile macro-environment.

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