Insurance giant Lloyd’s has announced moves to quit fossil fuel insurance policies by 2030, citing environmental concerns and its commitment to meet sustainable development goals as the primary motivation for the move.
As it stands, Lloyd’s, the world’s largest insurance market has confirmed it will make an exit from investments in the coal and oil sands industry, as well as projects involving the Arctic by 2022. Now, we’ve had a confirmation that the insurance giant will quit fossil fuel insurance policies and markets by 2030,
According to a report from The Guardian, “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.”
According to that same report, less than 5% of the market’s £35bn annual premiums come 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,” Lloyd’s Chairman, Bruce Carnegie-Brown said.
“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,” he added.
Lloyd’s insurance markets will also put an end to investments in coal-fired power plants, oil sands, Arctic oil exploration and coal mines by the 1st of January, 2022, and begin its plans to phase out investments in companies whose revenue is more than 30% dependent on fossil fuel extraction by 2025.
In reference to the ten-year phase out date for fossil fuel insurance, Lloyd’s chairman, Bruce Carnegie-Brown said “we want to try to support our customers in the transition and we don’t want to create cliff edges for them.”
He continued to explain that “oil is too fundamentally an energy supply source for the world today and it would be impossible to get out of that without creating a real dislocation to our customers. It’s an issue of calibration over time,” he said.
Lloyd’s has also confirmed its intention to become a more equal organisation for females after making the commitment of having at least 35% of its leadership positions filled by women by 2023.
This would apply to positions on Lloyd’s board and second-highest levels of management at the firm.
The announcement from Lloyds that it would quit the fossil fuel insurance industry by 2030 mirrors an announcement from one of Australia’s largest banks – ANZ – that it would transition its investment portfolio away from fossil fuel projects within the decade.
ANZ announced earlier this year that it would only lend money to renewable energy or gas-powered electricity projects, stating that by 2030 ANZ would have “exited all direct lending to coal-fired power generation and thermal coal mines.”
ANZ said that “over time, we will move away from working with customers that do not have clear and public transition plans,” toward renewable energy, adding that the bank would “encourage 100 of our largest emitting customers to develop transition plans in key sectors such as energy, transport, buildings and food, beverage and agriculture.”
ANZ’s chief executive, Shayne Elliot said at the time that “the measures announced today focus on supporting large institutional customers across all sectors in their transition to a low carbon business.”
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