17 December 2020
Lloyd’s of London will be publishing its first Environment Social and Governance (ESG) Report today, potentially ending the Adani Carmichael coal project’s ability to secure insurance in its marketplace.
According to reports, Lloyd’s is recommending companies operating in its market end the provision of new insurance policies for thermal coal, tar sands, and new Arctic energy exploration from 1 January 2022 and a complete phase-out of underwriting exposure to these fossil fuels by 1 January 2030.
“The Australian Government may not like the financial sector’s flight from fossil fuels, but there’s no way to turn back the tide. This is a good first step from Lloyd’s, but major gaps remain, in particular the ban on new policies should be immediate, and it should extend to all fossil fuels”, said Pablo Brait, campaigner at Market Forces.
The Lloyd’s market is currently providing insurance for the Adani Carmichael thermal coal project. However, even before Lloyd’s new coal restrictions, Adani’s access to that market was shrinking, with seventeen Lloyd’s syndicates, under pressure from the #StopAdani campaign, committing not to insure the project, including two of Adani’s current insurers (Aspen and Apollo).
“The spotlight is now on Lloyd’s insurers such as Brit, Convex and Hiscox, which are yet to commit to not underwriting Adani Carmichael. They must urgently clarify their stance on Lloyd’s new fossil fuel policy. If they support these changes then they must rule out insuring the Carmichael thermal coal project”, said Pablo Brait, Campaigner at Market Forces.
“Adani’s Carmichael project is in trouble. Already 28 major insurers have ruled out insuring the project. Lloyd’s was one of its last options after mainstream insurers including Liberty Mutual, HDI and Axa cut ties in 2019. Now that it is likely the Lloyd’s market will also turn its back, Adani’s lack of insurance for the construction and/or operation of Carmichael could see its creditors, shareholders and contractors bearing the significant risk.”
“It’s no surprise that the climate and reputation-destroying Adani Carmichael coal project is having trouble finding insurers. The project will open up a massive new thermal coal basin in the midst of the climate crisis, it is being contested by Traditional Owners who have not given their consent for the mine, it will destroy endangered species habitat and drain water supplies”, concluded Mr Brait.