Caving to pressure from climate action campaigners, Lloyd's of London, the world's largest insurance market, announced Wednesday that it will no longer cover coal-fired power plants and mines, tar sands, or Arctic energy exploration activities from January 2022 onward, with plans to fully phase out such businesses by 2030.
"Lloyd's needs to prohibits all members of its market from renewing insurance for the Adani Carmichael coal mine, the Trans Mountain tar sand pipeline extension, and other such climate-wrecking projects when they come up for renewal in 2021, not in 2030."
—Flora Rebello Arduini, SumOfUs
Framing the move as "a reversal of its traditional hands-off approach to climate change strategy," Reuters explained that "Lloyd's acts as regulator for around 100 syndicate members, and leaves decisions on underwriting and investment strategy to them."
While welcoming the announcement—along with Llyod's Environmental, Social, and Governance Report 2020—campaigners urged the market to ditch the fossil fuel industry on a more accelerated timeline, given warnings from scientists and world leaders about the necessity of an ambitious and urgent transition to a sustainable economy.
"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," said Lindsay Keenan, European coordinator for Insure Our Future, in a statement. "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," she said. "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."
The new policies came after the Insure Our Future campaign released its fourth annual scorecard on the insurance industry, dirty energy, and the climate emergency—which called out Lloyd's for underwriting and investing in fossil fuels, particularly coal.
Happy that @LloydsofLondon is finally joining rest of European insurers in ruling out coal insurance. Now, 56% of the reinsurance market have coal restrictions!
Disappointed that the policy doesn't require existing insurance policies of coal to be dropped until 2030. https://t.co/sWRN4qEcup
— Camilla Schramek (@CamillaSchramek) December 16, 2020
Lloyd's chairman Bruce Carnegie-Brown told The Guardian that "we want to align ourselves with the U.N. sustainability development goals and the principles in the Paris [climate] agreement," but also defending the 2030 choice.
"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."
Flora Rebello Arduini, senior campaigner consultant for SumOfUs, disagreed.
"Lloyd's needs to prohibits all members of its market from renewing insurance for the Adani Carmichael coal mine, the Trans Mountain tar sand pipeline extension, and other such climate-wrecking projects when they come up for renewal in 2021, not in 2030," she said in a statement.
"The time to act is now," she added. "Lloyd's must set binding market-wide policies that make clear to all stakeholders what can and cannot be done under Lloyd's brand name and credit rating."
"Lloyd’s has bowed to pressure from environmental campaigners & set a market-wide policy to stop new insurance for coal, oil sands & Arctic energy projects by January 2022, & to pull out by 2030."@LloydsofLondon is now the 25th insurers to end/limit cover for coal projects https://t.co/bzfVLqmOHR pic.twitter.com/o19yKU3XgX
SCROLL TO CONTINUE WITH CONTENT
We must raise $75,000 during our Winter Campaign. Can you help?
The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good.
— Insure Our Future Global (@InsOurFuture) December 17, 2020
We just shifted the biggest player in global coal insurance! Now, to keep pushing until @LloydsofLondon and all their insurers rule out Adani and all fossil fuels ASAP! We're looking at you @britinsurance & @HiscoxUK #StopAdani #InsureOurFuturehttps://t.co/xQRpgKpNyT
— Stop Adani (@stopadani) December 17, 2020
Adam McGibbon, U.K. campaigner for Market Forces, said that Lloyd's new report "sends a message to its syndicates that taking on new thermal coal risks, such as the Adani Carmichael coal project, is not supported," while U.S.-based campaigners suggested the policies boost pressure on companies across the Atlantic.
As Elana Sulakshana, energy finance campaigner at Rainforest Action Network, put it: "Lloyd's is sending a message to the U.S. insurance industry that it cannot continue its unchecked support for climate-wrecking projects under the Lloyd's name."
"Building on today's momentum, we will continue pressuring the U.S. insurance industry to match and exceed Lloyd's policies across their entire fossil fuel underwriting and investment portfolios," Sulakshana vowed.
AIG, Liberty Mutual, and other U.S. insurers that operate Lloyd's syndicates will be forced to abide by the new rules for their underwriting.
"The writing is on the wall—coal is becoming increasingly uninsurable," said David Arkush, climate program director at Public Citizen. "Lloyd's announcement makes AIG's and Travelers' refusal to even consider dumping coal even more inexcusable. These companies can talk all they want about sustainability, but until they change their underwriting policies, that talk is meaningless."
While the world's biggest insurance market signals an exit from coal, tar sands & arctic oil big US insurers like @AIGinsurance @Travelers @LibertyMutual @ChubbNA seem content to burn the planet down.
Come 2021 there will be nowhere to hide.
— Ross Hammond (@RossHammondSF) December 17, 2020
As the outgoing Trump administration works to open up the Arctic National Wildlife Refuge in Alaska to fossil fuel extraction, the Gwich'in Steering Committee is urging Lloyd's and insurers to join with dozens of financial institutions, including major U.S. and Canadian banks, in restricting support for Arctic drilling projects.
Lloyd's announcement is "a step in the right direction" but "not enough," said Bernadette Demientieff, executive director of the Gwich'in Steering Committee. " As Indigenous Peoples, we are living in ground zero of climate change while fighting to protect our sacred lands and our ways of life. People need to understand that the land, the water, and the animals are what makes us who we are."
"Our human rights have been violated not just by our government but by corporations and people that are not educated on Indigenous issues," she added. "We urge Lloyd's to join AXA and Swiss Re to exclude themselves from any Arctic Refuge energy development or exploration immediately and show the world that they respect the rights of Indigenous peoples whose lives will forever change if drilling is to occur."