Lloyds of London chief executive Inga Beale said the insurance market was looking into the best way it can help facilitate the transition to a low-carbon economy.
Lloyd’s of London is facing pressure from climate change groups to rewrite its rule book so that insurers no longer insure risky coal projects. The insurance market has already promised to distance itself from fossil fuels in April, but pressure groups are urging Inga Beale, the chief executive, to do more to drive change. Environmental organisations wrote to Ms Beale last week urging her to change the rules insurance companies must abide by to be members of the Lloyd’s market, the aim being to put insurers off trying to fill the gap which the exit of others from the sector has left. In a letter seen by The Telegraph, ClientEarth warns that coal creates huge risks so any Lloyd’s insurers refusing to cut ties with coal companies should be made to pay “extraordinary scrutiny” to the asset.
The insurance market could make this happen by adding a “robust assessment” into its rule book for members, the group said, arguing that the market’s changing investment policy needs to be meaningful and exclude key coal companies.
Ms Beale told The Telegraph that Lloyd’s was currently looking into “the best way” it can help the world move to a low carbon economy, adding that she was working closely with the relevant market associations. Insurers pulled more than $20bn (£15.2bn) from coal companies in the two years to November. The Unfriend Coal campaign has argued that insurers have the power to shift money away from coal and towards clean energy given they manage around $31 trillion of assets and certain projects cannot run without insurance cover. Peter Bosshard, the Unfriend Coal coordinator, said last year that if insurers cease to cover coal projects, power plants cannot be built and existing operations will have to shut down.
Worldwide, companies are reducing reliance on coal-fired power, which is the biggest single source of carbon dioxide emissions from humans.