by Sami Grover: Lloyd’s of London joins the ranks of big insurers who no longer see coal as a viable investment…
Insurance companies have long worried that climate change-related weather events could put make their jobs much, much harder. And their success also relies on being good stewards of other people’s money.
That’s presumably why insurance giants like Axa have often been on the forefront of divesting from fossil fuels, and now they are being joined by the oldest insurance market in the world.
Business Green reports that Lloyd’s of London has announced it will exclude coal from its investments, starting on April 1st of this year. It’s true, this isn’t as far reaching as some recent divestment decisions—most notably New York City and State’s efforts to divest their pension funds from all fossil fuels. But it is a highly symbolic move, and one more data point among many that coal is finally and permanently on the way out—regardless of any short-term changes of policy in Washington, D.C.
As more and more companies announce partial or total efforts to divest, the divestment movement itself takes a back seat to simple, economic momentum. Fewer and fewer companies see carbon intensive investments as a safe long-term bet, and that in itself undermines their status as a safe long-term bet. This create a vicious cycle that will be extremely hard for the industry to break out of, a cycle that is exacerbated by competition from increasingly cost effective and sometimes subsidy-free renewables.
I suspect there will be many more such announcements to come.