Lloyd’s receives broad praise for new ESG strategy

Lloyd’s has received broad praise in response to it publishing its first Environmental, Social and Governance Report, which details the market’s ambition to fully integrate sustainability into all of their business. But some campaigners have also said it does not go far enough.

Lloyd’s said its new Environmental, Social and Governance Report 2020 builds on its existing ESG work with a comprehensive market-wide strategy. The report highlights ongoing work to drive culture change across the Lloyd’s market and sets out a range of existing and new initiatives in support of the global transition to net zero.

The Chartered Insurance Institute welcomed the move saying it highlights the market’s leadership – but some campaign groups felt the changes should be swifter and deeper.

Keith Richards, chief membership officer of the Chartered Insurance Institute, said: “The challenges of achieving the ambitions of the Paris Agreement and the more recent Net Zero by 2050 target by the UK government, are fundamental to the future of our whole society, and insurance will play a huge role in the success of these goals, all around the world.

“Following the recent release of the government’s 10-point plan on net zero, their energy white paper and the Committee on Climate Change’s Sixth Carbon Budget, this report is a welcome response to a changing landscape, from the Lloyd’s market, and highlights the leadership our profession can take during this global transition.

“At the heart of this is the concept of building a brighter future, a philosophy that the CII has long shared, and we are delighted to support the launch of these detailed plans for a more environmentally conscious marketplace. We commend Lloyds for their work on this and their creation of an ESG Advisory Group to steer their ambitions as they progress.”

In contrast, the pressure group Insure Our Future, while broadly welcoming the moves, said they did not go far enough.

Lindsay Keenan, European Coordinator for Insure Our Future, said: “We welcome Lloyd’s new policy of no longer providing new insurance cover for coal-fired power plants, thermal coal mines, oil sands and new arctic energy exploration as a step in the right direction. 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.”