Lloyd’s new policy on Arctic energy exploration falls short

January 6, 2021

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FAIRBANKS, ALASKA (December 18, 2020) – Lloyd’s of London recently released its Environmental, Social and Governance Report, which asks Lloyd’s member companies to no longer provide new insurance cover for coal-fired power plants, thermal coal mines, tar sands and new Arctic energy exploration. The insurer committed to phase out its fossil fuel coverage by Jan. 2022, lacked specifics on whether the policy would apply to the Arctic National Wildlife Refuge and made no mention of fossil fuel production or transportation. Indigenous Peoples and allies noted that, while Lloyd’s announcement was a positive development, it is not enough and further highlighted the ever-growing gap between U.S. insurance companies and their global peers on climate action.

The announcement from Lloyd’s is a step in the right direction,” said Bernadette Demientieff, Executive Director for the Gwich’in Steering Committee. “However, it is not enough. As Indigenous Peoples, we are living in ground zero of climate change while fighting to protect our sacred lands and our ways of life. People need to understand that the land, the water and the animals are what makes us who we are. We honor what the Creator blessed us with and will stand united to protect it. We don’t only feel attacked by climate change, but we feel attacked by our very own government as well. A government that is not honoring their own founding fathers’ laws and policies. Our human rights are being violated not only by our government but also by corporations and people that are not educated on Indigenous issues.” If Lloyd’s met with the Gwich’in Steering Committee and made a public commitment, it would join insurers AXA and Swiss Re and more than two dozen global banks in committing to not support drilling in the Arctic Refuge. This includes the United States’ six largest banks—Morgan Stanley, Wells Fargo, Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup—and Canada’s five biggest banks.

“We urge Lloyd’s to join AXA and Swiss Re to exclude themselves from any Arctic Refuge energy development or exploration immediately and show the world that they respect the rights of Indigenous Peoples whose lives will forever change if drilling is to occur,” Demientieff added. 

Organizations working to prevent drilling in the refuge have warned corporations that pursuing oil and gas in the Arctic Refuge is fraught with risk and exposes them to unnecessary reputational, legal and financial risk. Drilling in the Arctic Refuge is an unpopular proposition in the United States. Two-thirds of votersoppose drilling in the Arctic Refuge, which is consistent with the long-held, popular, and bi-partisan support for permanent protection of the Arctic Refuge. More than 300 businesses also recently called on oil and gas corporations to not drill in the refuge. In addition, there are four active lawsuits questioning the legality of the sale, and the United Nations has issued two inquiries expressing grave concerns about the impacts of the project on the human rights of the Gwich’in.

Despite public opposition to drilling in the Arctic Refuge, the Trump administration ignored numerous concerns about the impact of oil development and did not adequately consult with Alaska Native Tribes. The Administration opened more than 1.5 million-acre of the coastal plain to oil and gas leasing with a controversial provision in the 2017 Tax Cuts and Jobs Act and is now rushing forward with a plan to hold a lease sale on Jan. 6, just weeks after the 60th anniversary of the Arctic Refuge’s founding. 

The Gwich’in Steering Committee and its allies have requested a meeting with Lloyd’s and noted that they will continue to pressure insurance companies, including Liberty Mutual, and oil companies to ensure the sacred calving grounds are protected.

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