From Regulation to Implementation: Lloyd’s Lab Helps Clarify What Insurers Need from Climate Intelligence

As Lloyd’s Lab Cohort 15 concludes, the insurance industry finds itself at an important moment. Following extensive industry consultation through CP10/25, the Prudential Regulation Authority has now published Supervisory Statement SS5/25, establishing enhanced expectations for how insurers manage climate-related risks and opportunities.

For many insurers, the focus is now shifting from understanding regulatory expectations to implementing practical solutions that support governance, reporting and decision-making.

Over the past ten weeks, Sustema has had the opportunity to work closely with insurers, sustainability teams, underwriters and portfolio managers through Lloyd’s Lab to discuss the challenges that they face as they respond to these evolving requirements.

While climate-related regulation is often associated with greenhouse gas emissions reporting, our discussions consistently highlighted a broader challenge. Insurers are seeking practical ways to understand the emissions profile of their portfolios, identify concentrations of exposure and develop management information that supports oversight at both an operational and board level.

Market participants repeatedly highlighted the importance of:

• Consistent emissions information across large and diverse portfolios
• Transparent methodologies that can be explained to regulators, boards and stakeholders
• Clear visibility of data quality and confidence levels
• The ability to compare companies against industry peers
• Portfolio-level insights that support decision-making, governance and reporting
• A need for consistent, granular tracking of climate risk transition pathways at individual client and portfolio levels

The conversations reinforced the importance of context. An emissions figure on its own provides limited value. To support meaningful decisions, insurers need to understand how GHG emissions relate to companies within their existing portfolios, how those companies compare with their peers, and where concentrations of exposure may exist within and across industry segments.

As Hans Zimmermann, Co-Founder of Sustema, commented:

“One of our biggest learnings from Lloyd’s Lab was that insurers are not simply looking for more GHG emissions data. They are looking for trusted emissions intelligence - information that is transparent, consistent and granular - to support real-world decision-making.”

The timing of Sustema’s participation in the Lab could not have been better. The Bank of England / PRA issued SS5/25, with a requirement that insurance carriers (licensed to write business in the UK) demonstrate how they operationalise different facets of climate risk in their business decisions. Sustema CARBON will be ready to support them by mid-year 2026.

We would like to thank Lloyd’s Lab, our mentor team and the many insurers who generously shared their expertise throughout the programme. Their input has helped shape our thinking and will play an important role in the continued development of Sustema CARBON.