Lloyd’s of London Environmental, Social and Governance Report 2020

ClientEarth argues that Lloyd's of London's 2020 ESG Report fails to align the insurance market with the Paris Agreement goals. The letter highlights gaps in the 'Climate Targets', such as the lack of restrictions on oil and gas (outside tar sands and the Arctic) and the absence of scope 3 emissions targets. ClientEarth asserts that the Society of Lloyd's has a legal duty under PRA Solvency II rules and the 'prudent person principle' to manage climate risks, which include physical risks making assets uninsurable and transition risks leading to stranded assets. The document questions whether the Climate Targets are binding and calls for transparent public disclosure of managing agents' compliance.

• The Climate Targets set in the ESG Report are deemed insufficient to align the Lloyd's market with the Paris Agreement because they do not require managing agents to reduce scope 1 to 3 emissions, and the Society's own targets relate only to operational emissions.
• The ESG Report's Climate Targets lack restrictions on the underwriting of or investment in oil and gas, with the exception of tar sands and Arctic exploration.
• The timelines for exiting coal, tar sands, and Arctic exploration are criticized for allowing renewals of existing policies until 2030 and creating a loophole for new projects underwritten in 2021.
• The 30% revenue threshold for restricting underwriting and investment in coal, tar sands, or Arctic exploration allows continued support for companies that maintain production levels inconsistent with the Paris Goals if their business is diversified.
• Climate change poses three primary risks to the insurance industry: physical risks that may render the world 'largely uninsurable', macro-economic risks to asset portfolios, and increased liability risks from climate litigation against energy majors.
• ClientEarth asserts that the Society of Lloyd's is legally obligated to manage climate risks under the PRA Agreement and Solvency II rules, specifically the 'prudent person principle' (PPP), which requires avoiding assets with risks that cannot be properly managed.
• The legal status of the Climate Targets is unclear as they are presented as 'asks' rather than binding rules, although ClientEarth argues the Council has the power to make them binding via the Membership and Underwriting Byelaws.

APA

ClientEarth (2021). Lloyd’s of London Environmental, Social and Governance Report 2020. https://www.clientearth.org/media/xavnveil/clientearth-letter-to-lloyd-s-on-esg-report-2020.pdf

Chicago

ClientEarth. Lloyd’s of London Environmental, Social and Governance Report 2020. 2021. https://www.clientearth.org/media/xavnveil/clientearth-letter-to-lloyd-s-on-esg-report-2020.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Lloyd’s of London Environmental, Social and Governance Report 2020 |date=14 June 2021 |url=https://www.clientearth.org/media/xavnveil/clientearth-letter-to-lloyd-s-on-esg-report-2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2021lloyds, author = {{ClientEarth}}, title = {{Lloyd’s of London Environmental, Social and Governance Report 2020}}, publisher = {ClientEarth}, year = {2021}, month = jun, url = {https://www.clientearth.org/media/xavnveil/clientearth-letter-to-lloyd-s-on-esg-report-2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }