Lloyd’s has announced it has launched a new consultation process on its roadmap for insuring the transition as campaigns urging the market to stop the insurance of fossil fuel projects continue.
The market’s CEO John Neal said the aim was to deliver greater clarity in Lloyd’s efforts to support the world’s efforts to transition to net zero, against a backdrop of continuing protests over the involvement of Lloyd’s syndicate sin the coverage of energy projects.
It said the consultation sets out Lloyd’s proposed approach for the next three years across all areas of sustainability for the market, including underwriting, investments, exposure management and capital and reserving.
“The roadmap has been designed to support market participants in evolving and embedding their own sustainability strategies, including navigating evolving regulatory reporting requirements,” added Lloyd’s. “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”.
The consultation 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. Lloyd’s added 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.
Neal said: “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.”
He added acknowledging that effectively planning and executing on transition plans is one of the greatest challenges businesses will face in the coming years, the details provided in the consultation can be used by brokers in their discussions with clients, as well as managing agents formulating their own transition plans, as and when is appropriate for each business.
Lloyd’s said it will further support managing agents in this area by providing guidance on new product areas, publishing thematic reviews on climate change and committing to develop a proof-of-concept for an emissions accounting measurement framework.
In March this year, Lloyd’s launched the Private Impact Fund, for sustainability-focused assets, across themes of Climate Mitigation and Adaptation.
Lloyd’s latest sustainability report outlined the progress made in 2022 against the United Nations Sustainable Development Goals (UN SDGs) but campaigners said the market’s syndicate still underwriter oil, gas and coal projects which are hindering the move to a clean energy future. As such, Lloyd’s Lime Street building ahs been the scene of repeated protests by climate groups as have the offices of its syndicates, with mor planned in the coming weeks.