If Lloyd’s of London thought it would win favour with its new coal divestment policy then it might be in for a rethink – because its moves have been met with stark criticism from the Unfriend Coal campaign.
Its new policy, which was announced in November and took effect yesterday, has been criticised for impacting “just 2.5% of the market” Lloyd’s oversees by protecting its just under £2 billion Central Fund only and leaving its syndicates “free to continue business as usual.” According to the campaigners, £77.5 billion has been exposed to climate risk.
“Lloyd’s could and should be going so much further. This policy only applies to a fraction of the capital which underpins the market,” said Alice Garton, ClientEarth’s company and finance lead. “Ultimately, it is the responsibility of Lloyd’s, and not just individual managing agents, to manage the stranded asset risks posed by coal. If either fail to do so, these risks will remain a threat to the stability of the market.”
Peter Bosshard, co-ordinator of the Unfriend Coal campaign, did not hold back in his comments – accusing the market of putting “profits ahead of people.”
“The Lloyd’s market continues to insure coal projects, even when other insurers are withdrawing cover for an industry that causes thousands of premature deaths each year and is fuelling dangerous climate change,” he said. “This is the same market which provides liability cover for gun owners – so-called ‘murder insurance.’ In both cases the market is putting profits ahead of the people whose health and wellbeing the insurance industry is supposed to protect.”
The campaign described Lloyd’s move as a “welcome but modest step” and did praise its decision to define coal companies as enterprises generating “at least 30% of their revenue or electricity from coal, produce at least 20 million tonnes of coal a year, or operate at least 10GW of coal-fired power stations.” However, it highlighted what it believes are a number of shortcomings such as “a loophole for investment in companies not captured by the divestment criteria which are developing at least 90GW of new plants,” and no commitment to divest from ‘extreme’ fossil fuels such as tar sands and arctic drilling.