Lloyd’s pledges to end investment in coal in first climate change policy push
Lloyd’s of London will end investment in thermal coal-fired power plants, thermal coal mines, oil sands and new Arctic energy exploration activities as part of the market’s first ESG strategy.
Lloyd’s typically has a more hands-off approach when it comes to climate change strategy. The market acts as regulator for around 100 syndicate members, and leaves decisions on underwriting and investment strategy to them.
But other regulatory bodies, such as the Bank of England, have stressed the risks of climate change for financial institutions.
“This is the first time we have set an ESG strategy for the Lloyd’s market and it represents an important milestone on the journey towards building a more sustainable future,” said Bruce Carnegie-Brown, chairman of Lloyd’s and its ESG committee
“We will work closely with our market and customers to help them plan for these changes as we implement a long-term managed programme towards sustainable, responsible underwriting.”
Managing agents in the market will also be asked not to provide new insurance cover for thermal coal-fired power plants, thermal coal mines, oil sands, or new Arctic energy exploration activities from 1 January 2022, with the target date for phasing out the renewal of existing insurance cover for these types of businesses set to 1 January 2030.
Lloyd’s has also said it will encourage all insurance undertakings in its market to allocate 2 per cent of annual premiums towards innovative and sustainable products by 2022.