When will Lloyd’s of London stop insuring fossil fuels?
Insurance might seem like a niche and rather mundane field. But without it, the most carbon-intensive fossil fuel projects driving the climate crisis cannot function. Since 2017, Greenhouse has been working with Insure Our Future to urge the world’s leading insurers to drop their underwriting and investments in coal and other climate-wrecking fossil fuel projects around the globe. In this blog, we reflect on our latest campaign targeting Lloyd’s of London – the world’s biggest insurance marketplace. It's time for Lloyd's to wash its hands of coal and tar sands.
Lloyd's of London
Lloyd’s of London invented the concept of insurance in a coffee house in 1686. Its famous underwriting hall on Lime Street, resembling the Pompidou building in Paris, sits in the financial heart of London. Lloyd’s is also the only major European insurer which has not committed to stop underwriting any fossil fuel projects.
According to insurance broker Willis Towers Watson, Lloyd’s controls 23% of the insurance market for new energy projects. The specialty insurers of the Lloyd’s market take pride in insuring what no-one else will – from footballers’ legs, to climate-wrecking fossil fuel projects which other insurers dare not touch.
One of these is the Trans Mountain tar sands pipeline in Canada. 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. In line with their commitments to climate action, three major insurance providers – Zurich, Munich Re and Talanx – recently decided to end their cover for the Trans Mountain pipeline. So Lloyd’s, covering $460 million of the project, is now the biggest insurer of the Trans Mountain pipeline to date.
And Trans Mountain is not the only carbon bomb in the Lloyd’s portfolio. The insurer has admitted to the Insure Our Future campaign that it is also involved in the Adani Group’s Carmichael coal mine in Australia – a giant project which has so far been shunned by more than 70 financial institutions, including 18 other insurers. If allowed to operate, it is estimated the 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.https://twitter.com/InsOurFuture/status/1300720951051669505?s=20
Demands and action
The campaign’s demands are very clear. Firstly, Lloyd’s must engage in an open dialogue about its policies. But it must also and end insurance and investments in fossil fuel projects not in line with the Paris Agreement. Now is the time to stop burying its head in the sand. So last Tuesday, Insure Our Future campaigners stood outside Lloyd’s HQ as it re-opened following COVID-19 closure in March. We proudly called on the insurer to ‘wash its hands of coal and tar sands’. Our launch of the campaign secured media coverage in over 80 publications, including Reuters, New York Times, The Guardian, Daily Telegraph, Daily Mail, Evening Standard and City A.M., and forced Lloyd’s to issue a response to the campaign. In the past week alone, two Lloyd’s subsidiaries have dropped support for the Adani Carmichael coal mine in Australia.
Where next for insurance and climate change?
Sadly, Lloyd’s of London is not the only climate laggard in the insurance sector. Many other insurers in the US and Asia also continue to cover major fossil fuel projects at will. AIG, Liberty Mutual and Travelers are North America's worst offenders. They refuse to insure homes damaged by Californian wildfires, despite continuing to insure fossil fuel projects accelerating the climate crisis. Tokio Marine in Japan, a key sponsor of next year’s Olympic Games, is one of Asia's top coal insurers. But the plates are shifting. Just last month, we helped announce the bold step taken by Australian insurer Suncorp, becoming the first to ditch all oil and gas projects. Who will be next?Greenhouse PR works with organisations and leaders who are pioneering climate action. Whether it’s food, fashion, finance or farming, if you’ve got a great story and need our help to tell it, get in touch with the Greenhouse team on 0117 214 1250 or email email@example.com.