Following a trial using a small data set of around 2,000 companies, the partnership developed a methodology framework to measure customers’ emissions and compare them with their industry and regional peers, which can be translated into a carbon risk rating.
This rating can then be considered in underwriting decisions.
TMK and CarbonChain began exploring their partnership in the summer of 2021 as part of a project within the Lloyd’s Lab, the innovation incubator of Lloyd’s.
In future project phases of the framework, customers will be made aware of their ratings based on reported data or industry benchmarks.
Customers who are not already measuring and reporting emissions data will subsequently be encouraged to do this to improve industry transparency.
In the longer term, TMK and CarbonChain’s project will consider the plans that customers develop to reduce their emissions over time – in line with national, global, and industry targets – as well as the total amount of reduction in emissions achieved, to decide upon a company’s carbon risk rating.
TMK CEO Brad Irick said: “We are excited to be taking a leadership role in working with existing and future clients as they transition to a lower carbon economy through this important and timely partnership with CarbonChain.”
Lloyd’s CEO John Neal added: “It’s great to see TMK partnering with CarbonChain through the Lloyd’s Lab and we are fully supportive of this initiative, which is line with our own ESG strategy and the guidance we have provided to the market, to support them in their transition to a sustainable future.”
The partnership comes amid a heightened industry-wide ESG focus, particularly within the Lloyd’s marketplace as it looks to set expectations on managing agents to develop ESG strategies next year.
With other means, the Corporation will use these strategies to monitor the Lloyd’s market’s transition.
