Activists say Lloyd’s of London watering down fossil fuel pledges S&P GlobalActivists say Lloyd’s of London watering down fossil fuel pledges S&P Global
Impact Investing Forum 2023
London. May 04-05, 2023.
Climate change activists are accusing Lloyd’s of London of “greenwashing” and watering down its environmental, social and governance policy after it said it would not order managing agents to stop insuring certain fossil fuel activities in 2022.
The Insure Our Future campaign published a guidance document that Lloyd’s issued to managing agents in October which makes it clear the market is not mandating that syndicates exclude coverage for thermal coal-fired plants, thermal coal mines, oil sands and Arctic energy exploration activity from Jan. 1, 2022.
The new guidance, originally only available by email but now published on Lloyd’s website, states it is up to each managing agent to craft its own ESG targets and policy. It stands in contrast to an ESG report published in December 2020 which stated that managing agents would be asked to provide no new coverage for those types of projects and infrastructure effective at the start of 2022.
“The guidelines clearly expose Lloyd’s rollback, [indeed abandonment], of the climate policies it announced in December 2020 and demonstrate a blatant case of ESG greenwashing,” Lindsay Keenan, European coordinator of Insure Our Future, said in a press release.
The activist group branded Lloyd’s October announcement that it had joined the Net-Zero Insurance Alliance, shortly before the COP26 climate summit, as an attempt to “distract from their watered down ESG policy.”
Lloyd’s said it published the guidance last week but made no further comment.
While not mentioned by Insure Our Future, the new ESG guidance also said Lloyd’s will not order managing agents to stop investing in thermal coal-fired plants, thermal coal mines, oil sands and Arctic energy exploration activity. In December 2020, Lloyd’s said it would phase out new investments in those projects and activities by the market and the Corporation of Lloyd’s by Jan. 1, 2022. It also said the market and the Corporation would phase out existing investments in those activities by the end of 2025, including investments in companies that derive at least 30% of their revenue from those activities.
Climate activist group ClientEarth said in a letter to Lloyd’s that although the market has made a commitment to shift to net-zero emissions by 2050, the new guidance shows it is not actually taking “meaningful action” to reach that goal. The group urged Lloyd’s to issue “binding directions” to managing agents to “adopt a science-based pathway” to achieve net-zero underwriting and investments.
Lloyd’s did not respond to requests for comment.