The Environment Agency Pension Fund (EAPF) attended the Lloyds banking group AGM on 16 May to raise a question of the board how they managed the physical risks of climate change. The EAPF holds approximately £350,000 worth of shares in Lloyds banking group.
In asking the question, Greg Black, nominated member representative, noted that physical risks are already being seen from climate change and that these affect banks. It was acknowledged that Lloyds banking group recognise this in its 2018 annual report and have a sustainability strategy in place including alignment to TCFD within 5 years and support for the Paris Agreement on climate change and the UK Government’s clean growth strategy.
In response the Lord Blackwell, Chairman of Lloyds banking group, stated that the group recognises the importance of climate change in its business activities. In particular Lord Blackwell stated that the group have significant insurance related activities and are keen that organisations consider the physical risks of climate change in this sector. Lord Blackwell stated that he would welcome future interaction with the EAPF to further explore how these risks can be addressed by the group.
Climate change featured strongly at the event. There was a dedicated stand highlighting Lloyds banking groups’ funding of renewable power generation and support, and use within their own fleet, of electric and hybrid vehicles. An opening speech was given by Sara Weller, Chair of the Responsible Business Committee. Sara discussed the ‘Helping Britain Prosper Plan’ under which Lloyds banking group make public commitments on the issues where it considers it can have the most impact to help Britain proposer economically, socially and environmentally.
A new sustainability strategy has been developed which focuses on the opportunities and threats related to climate change and the need for the UK to transition to a sustainable low carbon economy. This includes commitment to the TCFD and use and metrics and targets to track performance. Specific initiatives include investment in the world’s biggest wind farm, Hornsea One in the North Sea and efforts on transport resulting in Lloyds banking group have the UK’s largest low emissions vehicle fleet.
There was one other climate change related question. This was raised by Christian Aid who asked the board to provide a forward roadmap to achieve alignment with TCFD and the Paris Agreement.
Lord Blackwell responded that these are recognised by the group as key targets and efforts to align were discussed in Sara Weller’s opening speech on the sustainability strategy, the representative from Christian Aid thanked the Lord Blackwell for his response.