05 MAY 2021
Today’s QBE annual general meeting (AGM) saw a significant increase in the shareholder vote on a resolution calling for the insurer to set Paris-aligned oil and gas exposure targets, despite the company having attempted to placate investors with a lacklustre policy update in the interim. 21.4% of QBE’s shareholders today rejected the company’s do-nothing approach to oil and gas exposure.
The shareholder resolution, coordinated by Market Forces and co-filed with $5b fund manager Australian Ethical asked QBE to:
…disclose, in subsequent annual reporting, short, medium and long-term targets to reduce investment and underwriting exposure to oil and gas assets, along with plans and progress to achieve the targets set. The targets should be consistent with the climate goals of the Paris Agreement.
At the 2020 AGM, in the absence of any oil and gas policy, a similar shareholder resolution achieved 13% of the vote. Despite QBE releasing its oil and gas production underwriting policy as part of its Environmental and Social Risk Framework in February, in 2021 that vote increased to 21.4%.
Pressure from the floor
QBE faced prolonged questioning at the AGM over its long-awaited but ultimately inadequate oil and gas exposure targets.
QBE promised it would look at its support for the climate-wrecking oil and gas industries at both its 2019 and 2020 AGMs, where the issue featured prominently. The policy released in February via its Environmental and Social Risk Framework included some restrictions on tar sands and Arctic oil insurance from 2022, but business as usual on other oil and gas production until 2030 at the earliest. See our analysis for further detail.
These targets allow QBE to continue to insure new and expansionary oil and gas extraction projects, despite the urgent need to immediately start reducing oil and gas production if humanity is to have any chance of limiting global warming to 1.5 degrees and meet the Paris Climate Agreement goals. Even another massive loss in 2020, due in part to extreme weather, hasn’t been enough to convince QBE to stop shooting itself in the foot and end its support for the industries fuelling that worsening extreme weather.
Dr Simon Bradshaw, head of research at the Climate Council pointed out to QBE that its oil and gas targets undermine the Paris Agreement goals. In response, Chairman Mike Wilkins appeared to suggest the company would not be taking on new oil and gas customers.
When pushed on this point, Mr Wilkins stated that the company didn’t have a great appetite for new oil and gas customers, but failed to commit to shrinking the company’s oil and gas underwriting business.
Oil and gas ‘transition’ plans called out
In response to as number of questions, Mr Wilkins repeated claims that the insurer would “work with existing customers” in the oil and gas sector to ensure they develop Paris-aligned transition plans. However, neither Mr Wilkins’ response to a direct question on this matter nor the company’s disclosures have provided any information as to what QBE would expect these plans to entail, or how it will assess them for Paris-alignment.
Stuart Palmer from resolution co-filer Australian Ethical pointed out the glaring inconsistency between oil and gas companies’ current plans and the Paris climate goals. Mr Palmer cited Climate Action 100+ research, which has found all of the world’s 30 largest oil and gas producers are planning capital expenditure that is not aligned with the Paris Agreement goals.
This gulf raises serious concerns about QBE’s ability to deliver on its promise to bring oil and gas customers into line with the rapid decarbonisation required to meet global climate targets.
Other questions from the floor included the questioning of QBE’s stated commitment to the UN Sustainable Development Goals in the light of its continued support for the oil and gas industry, and a question on whether QBE could report “underwritten emissions” as part of its disclosures, so investors could track its progress and exposure to climate risk in its insurance business.
Ask QBE to stop insuring new oil and gas projects and to phase out its oil and gas underwriting and investing in line with keeping global warming below 1.5 degrees.