Lloyd’s to develop emissions accounting solution through new partnership

Lloyd’s of London has teamed up with Moody’s Analytics to develop a solution that will help to quantify greenhouse gas (GHG) emissions across managing agents’ underwriting and investment portfolios.

A statement released yesterday (14 September 2023) said the collaboration will see Lloyd’s and Moody’s develop a solution targeted at assessing scope three emissions defined by the Greenhouse Gas Protocol’s 15th category, which relates to underwriting and investments.

According to Lloyd’s, scope three emissions currently present the most ”significant challenge” for insurers due to limited volumes of data and company disclosures available.

Therefore, the solution is being designed to help aid managing agents in meeting expected regulatory reporting requirements.

Rebekah Clement, director of corporate affairs at Lloyd’s, said: “This new collaboration with Moody’s represents an important step on the path towards insuring the transition.

”A robust and credible emissions measurement process will allow us to meet our regulatory reporting requirements, while improving transparency across the Lloyd’s market. Moody’s have established expertise in this field and are well placed to help us achieve this.”

‘Well placed’

The partnership will begin with a 12-week proof of concept exercise, under the banner of Lloyd’s Lab’s new Lab Challenge Programme.

This has been established to tackle industry challenges and accelerate product development initiatives for Lloyd’s and the market.

As part of this, Lloyd’s said it was ”well placed” to help the market in solving the challenge of finding a common standard.

”By partnering with Moody’s Analytics, Lloyd’s will benefit from their pioneering efforts to solve the challenges of global data availability across public and private companies,” the marketplace added.

Andy Frepp, general manager for risk solutions at Moody’s Analytics, added: “Building on our unique experience in delivering specialised sustainable solutions and analytics to brokers, carriers and reinsurers, we are excited to help the Lloyd’s market quantify its insurance and financed-associated carbon emissions by leveraging our extensive carbon and financial data, advanced name-matching algorithms and the knowledge of our climate and insurance experts.”