Lloyd’s and Moody’s Analytics are to collaborate to develop a solution that will help to quantify greenhouse gas emissions across managing agents’ underwriting and investment portfolios. The solution being adopted aims to aid managing agents in meeting expected regulatory reporting requirements.

Under current frameworks such as streamlined energy and carbon reporting, many insurers will be required to report their greenhouse gas emissions. With further regulation from the international sustainability standards board and corporate sustainability reporting directive coming into force in the next few years, it will be necessary to have standardised reporting methodologies that can be adopted and are ready to use.

The collaboration will see Lloyd’s and Moody’s develop a solution targeted at accurately assessing Scope 3 emissions defined by the Greenhouse Gas Protocol’s 15th category, relating to underwriting and investments. By using the principles for carbon accounting financials standards as the starting point for measurement, this framework will help to guide clear carbon disclosures for the Lloyd’s market that will align reporting to an industry standard.

The collaboration will begin with a 12-week proof of concept exercise, under the banner of Lloyd’s Lab’s new ‘Lab Challenge Programme’. Lloyd’s and Moody’s will be inviting representatives from the Lloyd’s market to take an active role, feeding into the solution as a means for transparency and regulatory reporting.

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.”

Andy Frepp, general manager of 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.”

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