The new chief executive of Lloyd’s of London has as reversed the insurance market’s net zero policies and given insurers a green light to cover fossil fuels
Llyod’s new boss Patrick Tiernan said that the owners of the insurance market “will no longer ask insurers to stop providing insurance cover for coal or other planet-warming fossil fuels”.
He told the Financial Times that Lloyd’s planned to give its insurers more freedom, adding that “we respect the laws of the land” in the countries where they operate and the corporation defers to “the energy mix that the government of [a] jurisdiction chooses”.
In a statement on the Lloyd’s website, Tiernan said: “We must remain apolitical. Our neutrality is part of our value. In a world of strained trade relations, Lloyd’s licence network can be a safe harbour.”
Some media reports have blamed (given credit) the White House for the Lloyd’s move which comes “amid a backlash led by Donald Trump against pro-green financing”.
The Telegraph reports: Lloyd’s is a centuries-old insurance market where large corporations purchase insurance. As such, many of the world’s largest oil and gas giants use it insure against loss and damage to their fossil fuel projects – putting Lloyd’s in the crosshairs of environmental campaigners who say it facilitates climate change.
Mr Tiernan said: “It is important that Lloyd’s remains apolitical. The 2050 targets are government targets. We operate in multiple jurisdictions under different governments with different targets. We have to operate under the policies and the laws of where we operate.”
The reversal means Lloyd’s insurers will be free to ignore Mr Neal’s pledge to transform the insurance market into an entirely net zero business by 2050 by blocking insurers from underwriting fossil fuel projects that do not align with the climate target.
From now on they will be allowed to continue covering coal mines, coal-fired power plants and Arctic oil sands projects, despite Mr Neal’s pledge to ban insurers from underwriting such projects by 2030.
Mr Trump’s victory in the US elections last November has sparked an about-turn in global net zero policies, as the US president pushes to reverse many of the climate initiatives introduced by his predecessor, Joe Biden.
The president’s campaign slogan of “drill, baby, drill” has boosted fossil fuel projects and paved the way for many companies to ditch ambitious climate change targets, which some said were unrealistic.
In Britain, the Conservatives and Reform UK have made similar pledges to scrap net zero policies, citing concerns about the economic impact of transitioning.
Mr Neal, who was named Lloyd’s chief executive in 2018, started outlining Lloyd’s climate policies in 2020, with a view to aligning itself with aims of the Paris Agreement which was signed in 2016.
A Lloyd’s of London spokesman said: “Our aim is to support whatever energy mix individual governments determine is in their jurisdiction’s best interests while enabling managing agents to operate at the vanguard of new energy technologies.