Lloyd’s brags D&I & own emissions while plodding on 2050 net zero plan

Lloyd's ballyhooed reductions in internal greenhouse gas emissions plus diversity and inclusion gains at the top of its 2021 ESG report while work continues on the drudge work of plotting paths towards the larger 2050 net zero commitments taken for its investment and underwriting portfolios.

“A formative and foundational year in embedding our ESG plans across our market,” authors wrote of a year in which  Lloyd's joined the Net Zero Insurance Alliance (NZIA) and Glasgow Financial Alliance for Net Zero (GFANZ).

At  Lloyd's as across the industry, the only real in-depth reporting on climate goals concerns the group's own greenhouse gas emissions from its own operations.  Lloyd's own emissions ticked up 0.8% on easing of the lockdown in 2021, but the firm brags of a 12.5% reduction in CO2 emissions per employee.  Lloyd's hopes to trim 4.2% from its total greenhouse gas emissions in 2022 on its way to the 2025 target for a 25.2% reduction, apparently sufficient for a net-zero position.

“Our aim for 2022 is to achieve a 4.2% reduction in GHG emissions (aggregate target of 25.2% by 2025), in order to make headway on our near-term target of net zero by 2025,” authors note. Travel, flexible work arrangements and plant and equipment reviews top the action list.

On the investment side, a roadmap for greening up the Central Fund is due in October 2022.

For now, a recently launched Impact Investment Fund intended to reach 3% of the Central Fund allocation over time should be up and running in H1 2022. The other 2% of the existing commitment for a 5% first-step green allocation will come in private assets supporting decarbonisation. Options are being explored for a 20% private asset allocation “potentially enabling the Central Fund to achieve net zero targets through  Lloyd's investment platform.”

For underwriting, goals are more tightly focused on developing the carbon measurement and benchmarking for scoring insureds, a framework which also conditions much of the eventual targeting and progress in investments.

On diversity and inclusion,  Lloyd's claims to have met its short-term target of 20% female representation for members of the Council and Executive Committee and 46% female representation in the broader category of ‘leadership roles.’  Lloyd's claims cumulative cuts to its gender pay gap since 2017 of 33%. Lloyd's currently targets having one in three new hires in the market and the Society from a black and ethnic minority background. At  Lloyd's UK Corporation, some 23% of employees currently claim minority ethnic background.

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