Tuesday 3 May 2022
QBE’s board is facing a confrontation with shareholders at its AGM this Thursday, with a resolution placing its oil and gas policies under the spotlight.
The resolution has been co-filed by $6.8bn Australian Ethical and shareholders coordinated by advocacy group Market Forces. Active Super and U Ethical have already confirmed to Market Forces they will be supporting the resolution.
According to investor disclosures, a similar resolution in 2021 was supported by investors including BlackRock, Cbus, AXA, Credit Suisse, HSBC, Northern Trust, SunSuper, Storebrand, UBS, Vision Super and the California Public Employees’ Retirement System.
The resolution calls on QBE to align its oil and gas underwriting and investment activities with the goals of the Paris climate agreement. QBE set targets for its oil and gas underwriting in 2021, which allow it to continue to support the expansion of the oil and gas sector with almost no restriction until at least 2030. This puts QBE out of line not only with the Paris Agreement goals, but the International Energy Agency’s Net Zero by 2050 scenario.
Adding to QBE’s discomfort will be Lismore flood survivor Naomi Shine, who will be attending the AGM to force QBE’s directors to face the real-world consequences of its support for new oil and gas projects. Ms Shine’s home was destroyed in the so-called “one in 1000 year” floods of recent months.
QBE’s profits continue to be impacted by natural catastrophes, which it admits are increasing in frequency and severity. Its 2021 results show that catastrophe claims were 6.6% of net earned premium, up from 5.8% in 2020 and 3.7% in 2019.
Quotes
Attributable to Stuart Palmer, head of ethics research at Australian Ethical, an investor managing over $6.8 billion, which is co-filing the resolution. Stuart will be attending the AGM:
“We need to see greater action from QBE on oil and gas. The climate crisis is too urgent to wait for 2030 before winding back fossil fuels. QBE has fallen behind peers in the insurance industry in taking action, despite the growing financial impacts of climate change on the industry.
“As an investor, we want to see QBE following through on their commitment to support the goals of the Paris Agreement, for their business as well as for the well-being of people, animals and the environment. That means stopping underwriting the expansion of oil and gas. QBE says the evaluation of Paris alignment is complex and evolving, including because of the prospect of new technologies. Complexity and uncertainty is the business of insurance. It is not a good reason for QBE to close its eyes to the net zero transition and continue to underwrite the vast majority of the oil and gas sector without restriction.”
Attributable to Naomi Shine, Lismore flood survivor and Chairperson of Lismore Environment Centre who will be attending the AGM:
“The water came up to the ceiling of my house in these latest floods, the worst we’ve ever seen here in Lismore. My furniture and belongings destroyed. This is climate change at work, fuelled by fossil fuels. QBE’s willingness to insure new oil and gas fields will help make even more severe floods more likely – the opposite of what an insurance company should be doing. QBE helps oil and gas companies expand, while ordinary people suffer the consequences. It needs to stop.”
Attributable to Pablo Brait, campaigner at Market Forces who will be attending the AGM:
“Amid yet another round of record-breaking floods, which will probably once again blow-out QBE’s natural catastrophe payouts, QBE refuses to budge from its do-nothing approach to the climate-wrecking oil and gas industry. Climate science and the International Energy Agency are clear, no new oil and gas production can be constructed if we’re to limit global warming to 1.5 degrees and hit net zero emissions by 2050. QBE’s willingness to underwrite new oil and gas production undermines global efforts to deal with the climate crisis.”
“QBE’s business as usual approach to the most urgent crisis humanity has ever faced means this resolution is more important than ever, and we call on all QBE shareholders to support it. QBE is being left behind by its competitors Suncorp and IAG, which are both already on the way to phasing out much of their oil and gas exposure.”