Change to investment policy and further actions on coal risk

ClientEarth acknowledges Lloyd's decision to divest the Central Fund from companies heavily associated with coal starting 1 April 2018, but argues that this represents only 2.5% of the total assets in the 'Chain of Security'. The organization contends that coal-related stranded asset risks increase the likelihood of insolvency and property and casualty claims, thereby threatening the broader market's solvency. ClientEarth proposes that Lloyd's modify its Minimum Standards to require stress testing for coal risks, adopt the Task Force on Climate Related Financial Disclosures (TCFD) Recommendations as industry best practice, and mandate the use of peer-reviewed climate science in risk evaluations.

• The Central Fund's decision to divest from coal-associated companies starting 1 April 2018 will affect 75% of its assets, but the fund itself constitutes only 2.5% of the total assets within the 'Chain of Security', which amounted to £77,545m in 2016.
• Underwriting coal risks is linked to a higher risk of insolvency and a greater likelihood that insured parties will fail to maintain assets, which increases the risk of loss and impacts expected loss calculations under PRA rules.
• ClientEarth proposes that Lloyd's integrate stranded asset identification and stress testing for coal into its Minimum Standards, utilizing the TCFD Recommendations and peer-reviewed climate science to ensure prudent business conduct and solvency.

APA

ClientEarth (2018). Change to investment policy and further actions on coal risk. https://www.clientearth.org/media/n2hdurmq/letter-to-lloyd039s-on-coal-risk-ce-en.pdf

Chicago

ClientEarth. Change to investment policy and further actions on coal risk. 2018. https://www.clientearth.org/media/n2hdurmq/letter-to-lloyd039s-on-coal-risk-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Change to investment policy and further actions on coal risk |date=19 February 2018 |url=https://www.clientearth.org/media/n2hdurmq/letter-to-lloyd039s-on-coal-risk-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018change, author = {{ClientEarth}}, title = {{Change to investment policy and further actions on coal risk}}, publisher = {ClientEarth}, year = {2018}, month = feb, url = {https://www.clientearth.org/media/n2hdurmq/letter-to-lloyd039s-on-coal-risk-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }