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Activists claim Lloyd’s CEO is failing on market’s ESG commitment

17th February 2022 - Author: Matt Sheehan

Environmental activists have accused Lloyd’s CEO John Neal of failing to sufficiently align Lloyd’s policies with the climate rhetoric that has been repeatedly touted by the insurance and reinsurance marketplace.

john-neal-lloyds-ceoLloyd’s has consistently expressed support for environmental, social and governance (ESG) measures within its marketplace in order to help accelerate the transition to net zero and to slow the harmful effects of climate change.

The importance of better ESG approaches has been highlighted in a December 2020 report by Lloyd’s, and in a climate action roadmap published last year.

But network members of industry climate group Insure Our Future say that John Neal’s own stance fails to reflect the values expressed in these official Lloyd’s documents.

They note that Neal has allegedly referred to the Lloyd’s ESG policy as nothing more than a “provocative discussion document,” the guidelines of which are non-mandatory for Lloyd’s members.

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Activists further indicated that the stance of the Lloyd’s CEO may have been influenced by ongoing lobbying efforts from regulators, corporations, and state and national officials opposed to the Lloyd’s ESG policy and concerned about its ambitions.

And in another example of Neal’s purported ESG shortcomings, they note that Lloyd’s has shown no plans to align its policies with a recent International Energy Agency (IEA) report on coal mines and oil and gas fields.

“It is a serious problem that John Neal has not been well enough briefed, or is just personally sceptical, about climate science and the findings of the International Energy Agency,” said Lindsay Keenan, European Coordinator of Insure Our Future.

“An ESG policy touted by Carnegie-Brown as a ‘plan for becoming a truly sustainable insurance market’ has, under John Neal, become nothing more than a ‘discussion document’ that syndicates can take or leave as they see fit,” Keenan continued. “It is abundantly clear that John Neal prioritises profits at the cost of people and planet, and that under his leadership Lloyd’s policies fail to match its climate rhetoric.”

Activists were also critical of Neal’s stance on coal projects such as the Adani Carmichael mine in Australia, which the CEO has declined to provide a clear commitment on, despite personally encouraging syndicates not to back the project.

“The #StopAdani campaign has done the work John Neal should have done, and convinced the vast majority of its insurers to commit to never insuring the disastrous Adani Carmichael thermal coal project,” said Mia Watanabe, UK Campaigner at climate activist group Market Forces.

“Now, Neal needs to come clean and officially clarify if the Lloyd’s market remains exposed to Adani, and make the promise to not insure the climate-wrecking project in the future. If Lloyd’s cannot take this basic step, then its ESG policies have failed their most simple test and Adani Carmichael will continue to be a stain on its reputation.”

However, while maintaining their critiques of Neal, activists did acknowledge that the possibility of marketwide action at Lloyd’s remains limited due to competition laws, and questioned whether demands should be made of the UK Competition and Markets Authority to reduce legal barriers to action.

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