The world's largest insurance market, Lloyd's, has launched a climate action plan to help the insurance industry work with critical industries to support and accelerate the transition to a low-carbon economy.
According to Lloyd's, the insurance industry has a global capital pool of over $30 trillion. In addition, the cover it extends to organisations worldwide supports and enables the entrepreneurialism, innovation, and investment required to accelerate the world's transition to a more sustainable future.
Lloyd's climate action roadmap includes wide-ranging, practical steps that will help accelerate the transition of multiple industries to net-zero carbon. Many of the actions set out in the roadmap will be delivered at pace in 2021 and through the Lloyd's-chaired Sustainable Markets Initiative (SMI) Insurance Task Force launched last month.
Lloyd's climate actions include developing new risk transfer solutions to provide critical, enabling support for green innovation and renewable energy investment and expansion – together with a public-private disaster resilience, response, and recovery framework that will help protect developing nations from the evolving economic and societal impacts of climate change.
In developing the climate action roadmap, Lloyd's engaged with several insurers, Lloyd's market participants, brokers, and corporates operating across energy, transport, and the broader industry to understand how lower carbon footprint and explore the challenges needing the industry's support.
“By mobilising, coordinating, and delivering on these actions, the insurance industry can enable and accelerate the global transition towards a more sustainable world,” Lloyd's said in a statement.
Aside from the climate action plan, Lloyd's has also released a report detailing the steps it is taking now and will take in the future to address key themes of greener industry, transport, and energy.
The report, “Insuring a sustainable, greener future,” stated that Lloyd's is currently working towards de-risking critical decarbonisation activities, closing protection gaps, and acting as a facilitator to catalyse action across the industry, customers, government, and other key stakeholders.
As part of its goal to accelerate the pace of change, Lloyd's will work with critical industries to improve the knowledge around risk landscapes and help the insurance industry adapt to meet changing customer needs as the world transitions to a sustainable future.
“There is an ever-more pressing need for a coordinated global effort across industries to affect the monumental transformation needed to address the climate challenge,” said Bruce Carnegie Brown, the chair of Lloyd's and the SMI Insurance Task Force.
“Lloyd's is proud to play a role, together with the global insurance industry, in partnering with sectors to provide the risk management solutions and investment that will help enable and accelerate the necessary changes and drive action towards a more sustainable world.”
Lloyd's also offered assurances that it is committed to expanding coverage to support the growth of the greener energy sector and will facilitate the development of new insurance products for electric vehicles.