Lloyd’s ESG policy allows members to acquire new business in polluting sectors during 2021, and then continue providing cover for those dirty projects until 2030. More responsible insurers have already dropped coverage of coal, tar sands and Arctic energy due to the unacceptable climate impact. Lloyd’s should commit to no new and no renewal of coal, tar sands and Arctic energy insurance in 2021.
With Lloyd’s insurance, fossil fuel companies are digging new coal mines, building tar sand pipelines, and expanding oil and gas production. These projects are fuelling climate change and are often taking place in some of the most sensitive ecosystems in the world without the consent of impacted communities.
Lloyd’s ESG policy falls short
In December 2020, Lloyd’s published its first ESG policy in which it committed to ask its members to stop insuring and investing in coal, tar sands and Arctic energy projects. But, the policy falls far short.
According to Finaccord, Lloyd’s is among the world’s four biggest oil and gas insurers and invests billions in fossil fuel companies. Lloyd’s should stop insuring and investing in new oil and gas projects in 2021, and commit to phase out existing oil and gas insurance and investment in-line with IPCC’s 1.5°C pathway.
Insuring the unacceptable
Lloyd’s is insuring some of the world’s worst fossil fuel projects that other insurers have dropped or refused to cover due to their climate impact. Stark examples of projects and companies that Lloyd’s should immediately prohibit all members of its market from renewing insurance for include: the Adani Carmichael coal mine in Australia, the Trans Mountain tar sands pipeline in Canada, the Bahamas Petroleum Company’s offshore oil drilling, and coal mines in Poland.
Lloyd’s should make a clear public commitment that its members will not renew insurance for these climate destroying projects when they come up for renewal in 2021.
ADANI CARMICHAEL COAL MINE
If allowed to operate, it is estimated the Adani Carmichael coal mine will add 4.6 billion tonnes of carbon pollution to the atmosphere and will suck out at least 270 billion litres of groundwater over the life of the mine. Lloyd’s admitted in 2019 that some of its members are insuring the project and, whilst many individual Lloyd’s members have since confirmed they do not and will not insure the Adani Carmichael coal mine, a number of other members and Lloyd’s itself have refused to comment.
Due to the climate impact, the associated reputational damage and the campaigning pressure from the #StopAdani movement, more than 70 financial institutions, including several Lloyd’s members, have withdrawn from or committed not to be involved in the Adani Carmichael coal mine. Pressure is increasing on the few Lloyd’s members who continue to insure the project and those who refuse to rule it out. The global concern and criticism of this coal project, in addition to the extreme climate impacts, violation of indigenous rights, and environmental degradation, should send a very clear message to Lloyd’s and its members: Adani is not worth the risk.
Lloyd’s should publicly rule out any of its members from renewing any insurance or reinsurance services for the Carmichael coal project, including the mine, railway line, other associated infrastructure and project contractors.Discover more
BAHAMAS PETROLEUM COMPANY OIL DRILLING
After initially saying they had no record of their involvement, Lloyd’s eventually admitted to insuring the Bahama Petroleum Company’s (BPC) offshore oil drilling project which commenced an exploratory well in December 2020. The coalition Our Islands Our Future, are campaigning against the BPC project, and 18 Members of the U.S. Congress wrote a letter to the Prime Minister of the Bahamas “expressing opposition to the BPC’s offshore drilling project.” The initial exploration was unsuccessful and no commercial quantity of oil was found, however the company plans further exploratory drilling in the area.
Oil spills are a risk at every stage of this project, including exploration, production, transportation and daily operations from this polluting industry. New oil and gas projects are also completely incompatible with limiting global warming to 1.5°C and wreak havoc on ecosystems.
Lloyd’s should commit to not renew insurance for this climate-wrecking oil drilling.Discover more
TRANS MOUNTAIN PIPELINE
Cutting across First Nations territories and a National Park, Canada’s Trans Mountain pipeline carries oil from the Alberta tar fields to the Pacific Ocean. Tar sands are the most polluting source of oil, yet the pipeline’s capacity is currently being expanded from 300,000 to 890,000 barrels per day. The Trans Mountain pipeline is a major public health and environmental hazard with a long history of spills and leaks, and the expansion would only exacerbate these problems.
Trans Mountain’s 2020 insurance certificate stated that various Lloyd’s syndicates were amongst the insurers of the project. Other insurers, including Zurich, Talanx and Munich Re have committed to not renew insurance for the TMX project and Lloyd’s is understood to now be one of the principal insurers of the pipeline. In March 2021, Trans Mountain filed a request to the Canadian Energy Regulator to keep the names of its insurers secret, claiming that public pressure was causing insurers to drop the project.
Lloyd’s should stop insuring the Trans Mountain Pipeline and exit the tar sands sector entirely.Discover more
COAL MINE RE/INSURANCE
Lloyd’s supports the continuation of dirty polluting coal mines in Poland which are an embarrassment to the EU and completely at odds with the Paris climate agreement. PGE Capital Group is Poland’s largest energy sector company and Europe’s second biggest CO2 emitter, and operates two of the continent’s most polluting coal plants: Belchatów and Turów. PZU Group is one of the largest financial institutions and insurers in Poland, and in all of Central and Eastern Europe. PZU insures PGE and the majority of the Polish coal mining and power generation sector.
PZU reinsures a significant part of this coal business through its membership of Lloyd’s, specifically Lloyd’s Argenta Syndicate 2121. Instead of prolonging dependence on climate destroying coal mines, Lloyd’s should support a just and rapid energy transition for the Polish energy sector and its workers.
Lloyd’s and its members should stop providing reinsurance cover for coal production in Poland.Discover more