Lloyd’s launches consultation on net-zero transition

Published on Wed, 13/12/2023 - 14:42

Lloyd’s has launched a consultation on insuring the transition to a net-zero economy.

The insurance market said on its website that it was to use the consultation to set out its proposed approach for the next three years across all areas of sustainability for the market.

The strategy encompasses underwriting, investments, exposure management and capital and reserving.

Lloyd’s said: “Lloyd’s sustainability strategy is built on the foundation of our purpose of sharing risk to create a braver world. This roadmap supports this aim and is provided as a consultation document to the Lloyd’s market and our wider stakeholders.”

The consultation, it said, aims to provide clarity to all stakeholders on Lloyd’s ambition to be the transition’s insurer and the impact this will have on the market, give insight as to its oversight framework will operate, and share key transition-focused toolkits that the market can use to build capability and understand how a global transition can be considered as part of a business strategy.

Lloyd’s said in an accompanying statement that the details provided can be used by brokers in discussions with clients, as well as managing agents formulating their own transition plans, as and when is appropriate for each business.

John Neal, CEO of Lloyd’s, said: “We hope that in setting out this consultation, the market will have greater clarity on the approach the Corporation is planning to implement, to support our customers in facing the challenges of transitioning to lower carbon business models.”

He added: “Our aim is to give our market participants greater confidence in setting, embedding and operationalising their own individual climate strategies, through the transition and beyond.”

Lloyd’s went on to say that it was further supporting managing agents in this area by providing guidance on new product areas, publishing thematic reviews on climate change and committing to develop a proof-of-concept for an emissions accounting measurement framework.

The consultation also includes useful resources on managing the transition risk of managing agents’ investment portfolios. In March this year, Lloyd’s launched the Private Impact Fund, for sustainability-focused assets, across themes of Climate Mitigation and Adaptation.