Lloyd’s joins insurance alliance as it commits to net-zero underwriting

Lloyd’s has joined the Net-Zero Insurance Alliance (NZIA) and committed to transition its underwriting portfolio to net-zero greenhouse gas emissions by 2050 at the latest. It is creating a new market-wide Sustainability Transparency and Reporting Regime to measure and report on progress towards this commitment, and will set, publish and report against interim science-based targets every five years to drive near-term action. The UN-convened NZIA was created in July with founding members all from Europe. AXA is chair, with Allianz, Aviva, Generali, Munich Re, Scor, Swiss Re and Zurich Insurance all members of the group. Lloyd’s has come under criticism for being one of the last big insurers in Europe to lag on climate action, so its decision to join the NZIA on the eve of COP26 is welcome news. The market said it is now committed to transitioning its central investment fund to net zero by 2050. It said it will redirect capital to green investments that enable and accelerate this change. Lloyd’s will publish a detailed roadmap to achieve this goal within 12 months, drawing on best practice through the Net Zero Asset Owner Alliance, which commits insurers to net zero on the investment side by 2050, and outlining interim five-year targets. And after joining the NZIA, Lloyd’s will advocate and support all market participants to introduce and implement their own plans, in order to reach a net-zero underwriting position for the market as a whole by 2050 “at the latest”. “These new formal expectations will be embedded into the Lloyd’s market oversight framework, putting climate action at the heart of annual business planning cycles with syndicates,” it said. As a member of the NZIA, Lloyd’s also becomes part of the Glasgow Financial Alliance for Net Zero (GFANZ), the UN-backed group for financial institutions to make credible net-zero commitments through the UN’s Race to Zero. GFANZ now includes more than 250 financial firms from across the entire financial system, which are responsible for assets in excess of $88trn and are committed to aligning capital with net zero. John Neal, CEO of Lloyd’s, said: “We are delighted to join the Net-Zero Insurance Alliance and are fully committed to working collaboratively across the financial sector to achieve its net-zero ambition.” Rebekah Clement, sustainability director at Lloyd’s, said there is an enormous opportunity for the global insurance industry to “step up and support” its customers across multiple industries as they transition to a sustainable future. “In addition to setting out our own commitments to help accelerate this process through the Net-Zero Insurance Alliance, Lloyd’s also has a unique role to play in helping individuals, companies and communities across the world increase their resilience, innovate and transition to a low-carbon economy,” she added. Nigel Topping, UN high-level climate action champion, said: “Insurance will be absolutely critical to enabling that transition and to building resilience to climate shocks. I welcome the ambition from Lloyd’s in leading the Lloyd’s marketplace to a net-zero underwriting position by using its influence with market participants to full effect. Industry collaboration will also be essential to turning commitment into implementation and achieving real-world outcomes. We have no time to lose.”

Lloyd’s joins insurance alliance as it commits to net-zero underwriting

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