Climate still tough for industry and its reputation

If the Insurance industry needed any reminder that climate campaigners are not in any mood to ease their pressure on the industry to play its part in the fight against global warming it arrived this week.

Lloyd’s CEO John Neal held a meeting with the members of the Insure Our Future network which has been part of a concerted campaign to get the world’s oldest insurance market to put down clear markers as to when it will prohibit the underwriting of fossil fuels by its syndicates.

If Neal and the Lloyd’s team had hoped that the meeting would signal the start of an end to the campaigners’ criticism of the market it seems they have been badly wrong.

The Lloyd’s CEO met with Lindsay Keenan, european coordinator of Insure Our Future, and Mia Watanabe, UK campaigner at Market Forces. The pair said the meeting “revealed major problems with how Lloyd’s, and in particular its CEO, is addressing the climate crisis”.

They added that in “stark contrast to statements made by Lloyd’s Council Chairman, Bruce Carnegie Brown, and what is clearly written in Lloyd’s December 2020 ESG report, Neal stated that in his view Lloyd’s ESG policy was nothing more than a ‘provocative discussion document’”.

They also claimed that Neal has said following the publication of the report, he had been contacted and lobbied by regulators, corporations, and state and national officials from around the world who said they were against the ESG policy and concerned about its ambitions. He also confirmed that Lloyd’s had subsequently informed its members the ESG commitments were non-mandatory guidelines.

“It is a serious problem that John Neal has not been well enough briefed, or is just personally sceptical, about climate science and the findings of the International Energy Agency. An ESG policy touted by Carnegie-Brown as a ‘plan for becoming a truly sustainable insurance market’ has, under John Neal, become nothing more than a ‘discussion document’ that syndicates can take or leave as they see fit. It is abundantly clear that John Neal prioritises profits at the cost of people and planet, and that under his leadership Lloyd’s policies fail to match its climate rhetoric,” said Lindsay Keenan, European Coordinator of Insure Our Future following the meeting.

The campaign group’s statement made it clear that they felt Lloyd’s was not doing enough although it added that Neal had said that the UK competition law precluded the market from enforcing any ban ion the underwriting of specific risks.

Keenan’s requested that Lloyd’s invite Insure our Future members, climate scientists and impacted communities to meet with the Lloyd’s Council and ESG committee, and for Neal to join him in a public debate to clarify and discuss Lloyd’s policies.

The industry does have a major problem on its hands during the next 30 years and as the world moves to a net zero future will require the use of fossil fuels to change as the market moves towards clean and sustainable energy sources.

Many (re)insurers have publicly stated their support for the energy companies goes above and beyond the assumption of their current risks. They are also looking to support their transition to sustainable energy production. Indeed insurers will have a vital role to play in support the new breed of sustainable energy firms.

This week however has proved there is a significant disconnect between the role the industry believes it is and has to play with that of the role campaigners believe they should and could be playing.

The big concern is that the ongoing trial of the industry’s role is set to be heard in the court of public opinion, at a time when, ESG, climate change and its impact is growing in the global psyche.

Jon Guy,

Editor, Emerging Risks

The campaign group’s statement made it clear that they felt Lloyd’s was not doing enough although it added that Neal had said that the UK competition law precluded the market from enforcing any ban on the underwriting of specific risks.

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