Lloyd’s says that embedding ESG is a ‘top priority’
Lloyd’s of London has faced criticism from climate campaign groups for not doing enough following the release of its latest report.
The second 2021 Environmental, Social and Governance (ESG) report was published yesterday (17 May 2022) two days ahead of Lloyd’s of London’s Annual General Meeting on 19 May.
In its report, Lloyd’s stated that “embedding ESG across the market and corporation is a top priority for Lloyd’s”.
However, mothers from campaign groups Mothers Rise Up and Parents for Future UK are calling on Lloyd’s to stop insuring fossil fuel projects after meeting with Bruce Carnegie-Brown, Lloyd’s chairman.
The groups allege that although Carnegie-Brown acknowledges the severity of the climate crisis, the market is not moving as fast as science recommends.
Maya Mailer, mother and campaigner with Mothers Rise Up said: “Carnergie-Brown assured us that Lloyd’s are doing their best to phase out support for fossil fuel energy, but their best is not good enough. My daughter is four today and has yet to start primary school.
“She will be 12 and beginning her secondary education before Lloyd’s stops insuring even the worst fossil fuel projects – coal, tar sands and Arctic energy. Lloyd’s can and must move quicker.”
The parents urged Carnergie-Brown to meet with representatives of communities in Uganda and Tanzania which are affected by the proposed East African Crude Oil Pipeline.
Lloyd’s of London’s priorities for 2022 involve embedding its ESG strategy into its investment framework, as well as building out its net zero framework.
This will include launching the Impact Investment Fund so that it can channel 3% of the Central Fund – which currently standings at £3bn in total investment – to support its net-zero strategy. It will also be allocating 20% of investment to private assets.
A spokesperson for Lloyd’s said: “Our 2021 report outlines the progress we’ve made across the Corporation and market towards our goals on transforming our culture, how we are tackling climate action, strengthening our governance and giving back to our communities.
”Our guidance to the market, published in October 2021, remains unchanged. We remain of the view that ceasing to provide new cover for thermal coal-fired plants, thermal coal mines, oil sands and Arctic energy exploration activity, and phasing out of existing cover by 2030, remains a sensible and pragmatic ambition for supporting the energy transition.”
Lloyd’s will be launching its roadmap to get to net zero by 2025, as well as beginning implementation of its carbon management and reduction plan.
In the report, Carnegie-Brown and John Neal, Lloyd’s chief executive, said: “The year of climate action saw the global community rally behind the urgent task of tackling climate change, convening around pivotal moments like the COP26 (Conference of the Parties 26) summit in Glasgow.
“At Lloyd’s we’ve been clear that our market must be the insurer of the transition, supporting customers as they shift their business models and products to low carbon – while leading our industry to develop the solutions that can help society respond to the impacts of climate change.
“2021 saw us make new and important pledges against these goals, including our commitment to transition all our operations, investments and underwriting to net zero by 2050 or sooner – a commitment we strengthened by joining the Net Zero Insurance Alliance (NZIA) and Glasgow Financial Alliance for Net Zero (GFANZ).”
Lloyd’s also outlined the measures it has taken such as bringing leading voices together from insurance and beyond through HRH The Prince of Wales’s Sustainable Markets Initiative (SMI).
Carnegie-Brown as chair of the SMI Insurance Task Force said that Lloyd’s is mobilising the sector to build the tangible, inclusive solutions to build resilience against climate change – from products to support the development of renewable energies, to insurance frameworks that help developing economies respond to natural disasters.
Not doing enough?
Meanwhile, Rowan Ryrie, mum and organiser for campaign group, Parents for Future UK, said: “Carnegie-Brown sits in a unique position in an industry that’s enabling ongoing fossil fuel expansion, he has power over all our kids’ futures – but does not seem to have the courage to use it to make change happen quick enough.
“He talks about a managed and ordered transition away from fossil fuels but it’s our addiction to fossil fuels that is fuelling the energy crisis and climate chaos across the globe right now.”
Meanwhile, Lindsay Keenan, European Coordinator for Insure Our Future, said: “Lloyd’s of London has gone from a climate laggard to climate villain. Lloyd’s new ESG report is a disgrace, with no positive attributes in sight. It exemplifies many of the worst aspects of corporate greenwashing.
“Lloyd’s Council, led by its chairman Carnegie-Brown, needs to stop its failed greenwash public relations strategy and start taking genuine climate action by ensuring Lloyd’s members stop insuring and investing in new fossil fuels and phase out existing investments and insurance in-line with climate science.”
Carnegie-Brown and Neal added: “Insurance has always had a clear social purpose running through it. Built on the idea that the pooling of risk by many can protect the misfortunes of the few, it’s an example of how businesses can help society build resilience and confidence.”
Insurance Times has contacted Lloyd’s for further comment.