Lloyd's of London excludes coal

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Lloyd’s of London, the world’s oldest insurance market, has become the latest financial firm to announce that it plans to stop investing in coal companies. Lloyd’s will start to exclude coal from its investment strategy from 1 April. The definition of what is a coal company and the criteria for divestment will be set over the coming months. In other news :) the Church of England has gone further, pulling out of investing in companies that make more than 10% of their revenues from thermal coal or oil from tar sands.

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So they've finally realized that they will be bankrupted by climate change. took them long enough

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Helping the environment is a side-effect for most business. Now it sees  that is is killing the business. No choice but to stop.

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An insurance company selling its stake in a coal miner doesn't reduce coal output or consumption by a single ounce.

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Insurance companies seek low risk low return investments. Exiting coal as a market for low risk low return investment signals that the risk of not getting a full return on capital invested is real. Simple 

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Just now, Stephen said:

Insurance companies seek low risk low return investments. Exiting coal as a market for low risk low return investment signals that the risk of not getting a full return on capital invested is real. Simple 

the investment is becoming more toxic. And so therefore worth less.

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In US, a number of coastal places the private insurers have stepped out and so the government has stepped in. For instance, the state of Florida, which officially denies global warming, has encouraged a lot of expensive coastal development by insuring what the private sector won’t.

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In some ways I am more sad by the knowledge that this is purely an economic calculation rather than an ethical one. Economic motives seem to be the only operative force in politics these days. Only hope for change

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2 hours ago, Stephen said:

In some ways I am more sad by the knowledge that this is purely an economic calculation rather than an ethical one. Economic motives seem to be the only operative force in politics these days. Only hope for change

So economic calculations shouldn't factor in? 

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Lloyds are a business not a charity. They are reacting to a measurable change in the energy market; political and technological changes altering their business. They can see the gradual adoption of increasingly competative renewable technology. The future for Lloyds is not coal and it has laid down a marker.

Whether the Emerging economies can afford to drop coal at the same rate is another matter, we will probably see the development of nation-state support for insurance solutions supporting a parallel adoption of coal based technology in their markets.

 

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Some years ago investing in renewables was an ideological or ethical move. Now it's an economic one. This is why the shift to renewables is accelerating.

And this is not just a western trend. This is a global trend.

In India cheap solar and wind energy is killing the coal-based power plants :

https://qz.com/1272394/cheap-solar-and-wind-energy-prices-are-killing-indias-coal-power-plants/

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