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Addressing the challenges of climate change

Climate change is a key issue for everyone, and recent natural disasters show the very real cost that climate change could cause insurers in the future. 

Lloyd’s recognises the effects of climate change and the direct impact on the business community and we are in regular dialogue with insurers, businesses and policy makers to address the challenges of climate change, both for our industry and for the wider world.

The insurance sector enables business and individuals to manage risk including long-term threats such as climate change. The long-term stability of our economy hinges on an appropriate response to this threat. 

In 2007, Lloyd’s became one of the founding members of the ClimateWise Initiative. Lloyd’s continues to support action to tackle climate change and has played a leading role in ClimateWise – a collaborative endeavour by insurers to drive action on climate change.

Climate Wise logo

The six ClimateWise principles

The ClimateWise principles have been developed following consultation between the former Prince of Wales’s Business & Sustainability Programme, Lloyd’s, the ABI, and other insurance market participants. 

Lloyd's is an active member of the group and over 30 insurance companies are members, including ten managing agents in the Lloyd's market.

ClimateWise's six core principles form the framework of Lloyd's approach to responding to climate change.

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Lead in risk analysis

We encourage collaboration. Risks are changing and we intend to keep pace.

Sub principles:

  1. Support and undertake research on climate change to inform our business strategies and help to protect our customers’ and other stakeholders’ interests. Where appropriate share this research with scientists, society, business, governments and NGOs in order to advance a common interest.
  2. Support national and regional forecasting of future weather and catastrophe patterns affected by changes in the earth’s climate.
  3. Use research and improve data quality to inform levels of pricing, capital and reserves to match changing risks.
  4. Evaluate the risks associated with new technologies for tackling climate change so that new insurance products can be considered in parallel with technological developments.
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Inform public policymaking

Policymakers around the world are looking to business to help them combat climate change. We intend to continue the dialogue.

Sub principles:

  1. Work with policy makers nationally and internationally to help them develop and maintain an economy that is resilient to climate risk. This should include supporting the implementation of emissions reductions targets and where applicable supporting Government action that seeks to enhance the resilience and reduce the environmental impact of infrastructure and communities.
  2. Promote and actively engage in public debate on climate change and the need for action.
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Support climate awareness

We share our views on climate risk with our customers, including those in the developing world. Through ClimateWise we are calling for regulations to help insurers to rebuild sustainably after a catastrophe.

Sub principles:

  1. Inform our customers of climate risk and provide support and tools so that they can assess their own levels of risk.
  2. Encourage our customers to adapt to climate change and reduce their greenhouse gas emissions through insurance products and services.
  3. Seek to increase the proportion of non-life claims that are settled in a sustainable manner.
  4. Through our products and services assist markets with low insurance penetration to understand and respond to climate change.
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Investment strategies

This approach is designed to support measures that will improve the long-term performance of investee companies.

Sub principles:

  1. Evaluate the implications of climate change for investment performance and shareholder value.
  2. Incorporate the material outcomes of climate risk evaluations into investment decision making.
  3. Communicate our investment beliefs and strategy on climate change to clients and beneficiaries.
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Reduce environmental impact

As part of our continued commitment to the environment, Lloyd’s has been tracking our greenhouse gas emissions (GHG) since 2008.

Sub principles:

  1. Engage with our supply chain to work collaboratively to improve the sustainability of their products and services.
  2. Measure and seek to reduce the environmental impact of the internal operations and physical assets under our control.
  3. Disclose our direct emissions of greenhouse gases using a globally recognised standard.
  4. Engage our employees on our commitment to address climate change, helping them to play their role in meeting this commitment in the workplace and encouraging them to make climate-informed choices outside work.
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Report and be accountable

The Corporation of Lloyd’s is committed to ClimateWise and supports companies in the Lloyd's market in their activities related to climate change.

Sub principles:

  1. Ensure that the organisation is working to incorporate the Principles into business strategy and planning by encouraging the inclusion of the social and economic impacts of climate risk as part of the Board agenda.
  2. Publish a statement as part of our annual reporting detailing the actions that have been taken on these principles.

Our progress

Lloyd's is committed to the ClimateWise principles, and has taken actions to achieve progress against the principles; as detailed in our annual ClimateWise reports.

The Lloyd’s market and ClimateWise

Climate change is recognised as an issue at Board level at Lloyd’s and each managing agent has a ClimateWise sponsor at Board or senior level.

CompanyDesignated board memberTitle
Philip Grant
Non-Executive Director
Adrian Cox
Chief Underwriting Officer
David Furby
CEO, Chubb European Group
HiscoxMichael Schenstrom
Director of Group and Finance Operations
MS Amlin
James Few
Global Managing Director, Reinsurance
Carl Bach III
Chief Executive Officer, NUAL, Navigators, Syndicate 1221 at Lloyd's
Nigel Terry
Chief Risk Officer
Renaissance Re
Ian Branagan
SVP Group Chief Risk Officer
Tokio Marine Kiln
Charles Franks
Chief Executive Officer