Australia’s biggest insurer and fossil fuel underwriter QBE Insurance admits it needs to manage climate change risks much better but rejects shareholder vote for action.
3 May 2018
Today a shareholder resolution calling on QBE to disclose the risks to its business from climate change was backed by 18.6% of shareholders, one of the biggest votes for climate action at an Australian AGM ever.
The resolution, coordinated by Market Forces and co-filed by $10 billion superannuation fund Local Government Super, dominated the AGM as QBE suffered the financial impact of another horror year for weather catastrophes.
The votes in favour of QBE disclosing climate risk amounted to about $2.6 billion in shareholder capital, and a major rebuke to QBE for failing to act so far.
QBE and Carmichael coal mine don't mix?
In more good news, QBE also appears to have virtually ruled out backing Adani’s controversial Galilee Basin coal mine, at least for now.
When asked if QBE had been approached by Adani to provide insurance for its Carmichael mega mine, CEO Pat Regan said that QBE generally did not underwrite thermal coal mines in their development phase.
Climate change biting at QBE's bottom line
2017 was one of the worst years on record for global weather catastrophes. Recent natural disasters such as tropical Cyclone Debbie in Australia, Californian wildfires and Hurricanes Harvey, Irma and Maria in the Americas wiped out hundreds of billions of dollars of global insurance shareholders’ money.
Despite this, when asked if QBE’s board agreed that more global warming meant even more extreme weather impact on the insurer’s financial bottom line, chairman Marty Becker dodged the issue. Exposure to such weather events, he said, was why QBE is engaging on climate.
Having an impact
CEO Pat Regan faced particular pressure, as QBE's shareholders lodged a "first strike" against the company's remuneration report (meaning if more than 25% of shareholders vote against the report next year, a spill of the entire Board takes place) and a significant protest vote against his own bonuses.
With extreme weather causing so much of the company's poor performance, Regan was quick to reassure shareholders that work on climate risk disclosure would start straight away. Here's what he had to say:
All very well, but QBE still needs to commit itself to a clearer timeframe for when we'll see disclosures reach the public domain - certainly much sooner than the 3-5 years it mentioned today.
Shareholder engagement around climate change is gaining traction, but many super funds are still failing to take their opportunities to support climate action.
Use the form below to ask how your fund voted on the QBE shareholder resolution, as well as other climate-related resolutions recently proposed at Santos and Rio Tinto.