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Lloyd’s takes insurance stance against some fossil fuels

Taking action: Lloyd’s of London is to start phasing out insurance cover for and investments in some fossil fuel enterprises, including thermal coal mines, oil sands and coal-fired power plants (File photograph by Susan Montoya Bryan/AP)

Lloyd’s of London is asking managing agents to no longer provide new insurance cover for coal-fired power plants, thermal coal mines, oil sands and new arctic energy exploration.

It said is to start phasing out such coverage. In its first Environmental, Social and Governance Report, released on Thursday, Bruce Carnegie-Brown, Lloyd’s chairman, wrote: “For the first time we are setting targets for responsible underwriting and investment to help accelerate society’s transition from fossil fuel dependency, towards renewable energy sources.

“Following feedback from and in consultation with our market, Lloyd’s will start to phase out insurance cover for, and investments in, thermal coal-fired power plants, thermal coal mines, oil sands, or new Arctic energy exploration activities.”

Mr Carnegie-Brown said that to enable the market to transition away from these energy sources towards sustainable energy and business models, managing agents will be asked to phase out existing coverage by January 2030.

He also said: “In addition, we have also committed to the phasing out of the market’s and the corporation’s existing investments in thermal coal-fired power plants, thermal coal mines, oil sands, or new Arctic energy exploration activities by the end of 2025.”

The Insure our Future campaign, which this month published its fourth annual scorecard on insurance, fossil fuels and climate change, welcomed the step by Lloyd’s.

Lindsay Keenan, European coordinator for Insure Our Future, said: “We welcome Lloyd’s new policy. However, the policy should take effect now, not 2022. Additionally, the target date for Lloyd’s to phase out existing policies should be January 2021 for companies still developing new coal and tar sand projects. Lloyd’s 2030 deadline is not justified by climate science and the urgent need for action. We will continue to hold Lloyd's accountable until it has met these recommendations.”

Flora Rebello Arduini, senior campaigner consultant for SumOfUs, said: “The time to act is now. Lloyd’s must set binding marketwide policies that make clear to all stakeholders what can and cannot be done under Lloyd’s brand name and credit rating.”

While Adam McGibbon, UK campaigner for the Market Forces organisation, added: “Lloyd's new ESG report sends a message to its syndicates that taking on new thermal coal risks, such as the Adani Carmichael coal project, is not supported.”

The report from Lloyd’s came only days after Market Forces said Bermudian-based Fidelis Insurance was the 28th major insurer to rule out offering insurance for Adani Carmichael, a giant coalmine project in Queensland, Australia. Market Forces said it had received confirmation of this from Fidelis’s chief executive officer Richard Brindle.

Fidelis has also published an environment and sustainability statement that said: “We are committed to driving forward anti-coal initiatives, we look to shape change by not offering insurance to companies that extract coal or generate energy using coal.”

Pablo Brait, of Market Forces, said: “Every insurance company in the world should be running a mile from the climate and reputation-destroying Adani Carmichael coal project. In fact, 28 of them already have. The project will help open up a massive new thermal coal basin in the midst of the climate crisis.”

He added: "At a time when insurance company profits are being hit by global warming-fuelled extreme weather, no insurer can claim to be responsible or ethical if it is open to making the problem worse by insuring new thermal coal projects. The remaining Lloyd’s syndicates yet to take a position on Adani Carmichael, such as Brit, Convex and Hiscox, must urgently join their peers and rule it out before their reputations are irreparably damaged."

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Published December 21, 2020 at 8:00 am (Updated December 20, 2020 at 5:27 pm)

Lloyd’s takes insurance stance against some fossil fuels

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