Lloyd’s has announced that it is joining the UN-convened Net Zero Insurance Alliance (NZIA).
In joining the alliance, the Lloyd’s Corporation commits to transition all of its operational and attributable greenhouse gas emissions to net-zero by 2050 at the latest. It will also set, publish and report against interim targets every five years.
The move builds on Lloyd’s commitment to reduce all the operational emissions at its London building to net-zero before 2025 by setting out further goals in two major areas:
- Transitioning Lloyd’s Central Fund to net-zero: The Lloyd’s Central Fund provides protection for Lloyd’s customers and the market against severe tail-end events. In joining the NZIA, Lloyd’s will transition the fund to net-zero by 2050 by redirecting capital to green investments. Lloyd’s said it would publish a detailed plan for achieving this goal within 12 months
- Leading the Lloyd’s market to a net-zero underwriting position: Lloyd’s will advocate and support all market participants to introduce and implement their own net-zero plans. The new formal expectations will be embedded in the Lloyd’s market oversight framework
Lloyd’s is also creating a new market-wide “Sustainability Transparency and Reporting Regime” that will be used to measure and report on the market’s progress toward a net-zero underwriting position by 2050. The framework will be piloted with a select group of managing agents next year, before being refined and scaled across the marketplace in 2023.
By joining the NZIA, Lloyd’s also becomes part of the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed group for financial institutions to make net-zero commitments. GFANZ includes more than 250 financial firms from across the entire financial system, responsible for assets in excess of $88 trillion.
“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,” said John Neal, CEO of Lloyd’s.
“There is an enormous opportunity for the global insurance industry to step up and support our customers across multiple industries as they transition to a sustainable future,” said Rebekah Clement, sustainability director at Lloyd’s. “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.”
“It was in the Lloyd’s building that I first called on the financial sector to break the ‘tragedy on the horizon’ and confront climate risk before it was too late,” said Mark Carney, the UK prime minister’s finance adviser for COP26. “I welcome Lloyd’s joining the Net-Zero Insurance Alliance and the Glasgow Financial Alliance for Net Zero. by joining the Net-Zero Insurance Alliance – the gold standard for net-zero commitments and action – Lloyd’s is demonstrating its commitment to net zero and enabling a more resilient, smooth and rapid transition.”