For immediate release: 18 February 2022
QBE’s willingness to underwrite new oil and gas projects will see it once again face a shareholder resolution, coordinated by Market Forces and co-filed with Australian Ethical, an investor managing over $6.5 billion as of September 2021. The resolution calls on QBE to align its business with the climate goals of the Paris Agreement.
QBE claims to support the goals of the Paris Agreement and only last week it announced that it joined the Net Zero Insurance Alliance, committing to net-zero emissions by 2050 across its underwriting and investment activities.
Leading research organisations and the UN have found that between 2020 and 2030, global oil and gas production must decline annually by 4% and 3%, respectively, to be consistent with the Paris Agreement’s 1.5°C warming goal. In its 2021 Net Zero by 2050 scenario, the International Energy Agency (IEA) clearly states the net zero pathway requires no new oil and gas production projects.
However, QBE’s current Environmental and Social Risk Framework allows QBE unrestricted underwriting of new oil and gas production until at least 2030 (with the exception of tar sands and some Arctic oil).
Attributable to Pablo Brait, campaigner at Market Forces:
“QBE supports the Paris Agreement and the net zero by 2050 target with words, but not with its actions. 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.”
“Market Forces has coordinated a shareholder resolution calling on QBE to align its underwriting and investment practises with Paris. QBE’s business as usual approach to the most urgent crisis humanity has ever faced means this resolution is more important than ever and the resolution will be lodged in coming weeks. 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.”
Attributable to Stuart Palmer, head of ethics research at Australian Ethical, which is co-filing the resolution:
“We need to see greater action from QBE on oil and gas. The climate crisis is too urgent to wait for 2030 before winding down 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.”
In contrast with QBE’s approach, Suncorp announced in 2020 that it would immediately stop all underwriting for new and additional oil and gas production and exploration projects, and would phase out all underwriting of oil and gas extraction by 2025. IAG will phase out oil and gas production underwriting by 2023.
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.
“QBE is getting smashed by natural disasters, fueled by global warming, yet its underwriting of new oil and gas projects will only make this problem worse”, Mr Brait concluded.