Lloyds to stop new insurance cover for coal

Lloyd’s, the world’s biggest insurance market, has bowed to pressure from environmental campaigners and set a market-wide policy to stop new insurance cover for coal, oil sands and Arctic energy projects by January 2022, and to pull out of the business altogether by 2030. In its first environmental, social and governance report, Lloyd’s, which has been criticised for being slow to exit fossil fuel underwriting and investment, said the 90 insurance syndicates that make up the market would phase out all existing insurance policies for fossil fuel projects in 10 years’ time. Less than 5% of the market’s £35bn annual premiums comes from insurance policies in this area. “We want to align ourselves with the UN sustainability development goals and the principles in the Paris [climate] agreement,” said the Lloyd’s chairman, Bruce Carnegie-Brown. “A lot of syndicates are already doing some of the things we are setting out here but we are trying to create a more comprehensive framework for the whole market.” The Lloyd’s market will also end new investments in coal-fired power plants, coalmines, oil sands and Arctic energy exploration by 1 January 2022, and phase out existing investments in companies that derive 30% or more of their revenues from this area by the end of 2025. Carnegie-Brown defended the 2030 target date for ending fossil fuel insurance. “We want to try to support our customers in the transition and we don’t want to create cliff edges for them,” he said. “Oil is too fundamental an energy supply source for the world today and it would be impossible to get out of that without creating real dislocation to our customers. It’s an issue of calibration over time.” Lindsay Keenan, European coordinator of the Insure Our Future campaign, which has pressured many insurers globally into divesting from coal, said: “It’s a good step forward but it’s clearly not ambitious enough. The 2030 deadline is hard to justify given the science.” He voiced concerns about two controversial projects: the Trans Mountain tar sands oil pipeline extension in Canada, which is partly underwritten by Lloyd’s insurers, and Adani’s Carmichael coalmine in Australia, where Lloyd’s insurers have also been involved. Lloyd’s declined to comment on those two projects. Lloyd’s also committed itself to having women in 35% of leadership positions across the insurance market – board level and the two layers below the board – by the end of 2023. At the moment, women make up less than 25% of leadership roles. The firm will also set targets for black, Asian and minority ethnic representation next year, once it has collected more data from its members. The environmentalist and journalist Flemmich Webb, who died in November aged 49, worked tirelessly with colleagues on the Lloyd’s sustainability report released on Thursday. “This will be a fitting and long-lasting legacy for a deeply respected colleague,” the company said in a statement.