Home > QBE’s fossil fuel inconsistency questioned at AGM

QBE’s fossil fuel inconsistency questioned at AGM

7 May 2020

7 May 2020

As has been the case now for several years (see 2019 and 2018), fossil fuels and the climate crisis dominated insurance company QBE’s annual general meeting (AGM) today, despite it being shifted online due to the COVID-19 pandemic.

With QBE having announced its exit from thermal coal insuring and investment in 2019 in response to a strong community campaign, the focus of the questions and a shareholder resolution was on its continued support for the climate-destroying oil and gas industry.

Several shareholder questions were on this theme.

QBE’s oil and gas exposure

Regarding QBE’s energy policy, which has remained unchanged since its release over 12 months ago, Cr. Jo Dodds from Tathra, president of Bushfire Survivors for Climate Action wanted to know why the promises made at last year’s QBE AGM to review and change the company’s energy policy had not been kept. “Is QBE’s energy policy still a ‘living document’, or has it died due to neglect?”, she asked.

QBE Chairman Mike Wilkins insisted that the Energy Policy was still a living document, despite the promised changes and reviews having not occurred, and stated that QBE considered environment, social and governance (ESG) factors in all its underwriting and investing activities.

See Jo’s full question including a powerful introduction on her experience living with bushfire below.

Sally Hunter, a farmer from Boggabri in NSW was unable to ask her question, due to several climate-related questions being lumped in together. Sally is extremely concerned about the Santos coal seam gas project in her area, and wanted to know why QBE continued to incorrectly describe gas as a “transitional fuel” in its Energy Policy. This is a question that has been asked of QBE in several fora, with no response as yet. See Sally’s question in the video below.

Another shareholder asked about QBE’s inconsistency in its handling of the climate risk posed by oil and gas exposure when compared to the way it is dealing with risk from thermal coal.

Last year QBE released an energy policy which saw it end its underwriting of new thermal coal projects and phase out its underwriting exposure to thermal coal by 2030.

Why isn’t it taking a similar approach and setting specific targets for oil and gas exposure? Why did it separate thermal coal specifically, but is lumping in oil and gas with portfolio-wide metrics and targets?

QBE shareholder

QBE’s current plan to lump oil and gas exposure in with portfolio-wide targets, rather than treat them separately like it has with thermal coal, has some shareholders worried that it allows QBE to mask any increase oil and gas exposure. QBE’s Chairman said these portfolio-wide targets would be “specific”. What that means will be determined when they are published later in 2020.

Warming scenarios and insurance “red zones”

On climate more broadly, the question from Market Forces campaigner Pablo Brait asked for an explanation behind QBE’s strange decision to base its climate risk metrics and targets on 1.7 degree warming scenarios rather than 1.5 degrees.

In a meeting in March, QBE told the Market Forces group that it is basing its climate risk metrics and targets on a 1.7 degrees of warming scenario.

Why not 1.5 degrees in line with the ultimate goal of the Paris Agreement?

Has QBE modelled the hit its earnings will suffer with an additional 0.2 degrees of warming? If so, what is it?

Pablo Brait, Market Forces Campaigner

QBE Chairman Mr Wilkins didn’t answer the questions, but said that QBE was “satisfied with the 1.7 degree models that we’re using” and said 1.7 degrees of warming was in line with the Paris Agreement.

Another bushfire survivor from Tathra in NSW, Lies Paijmans, who lost her home in 2018, asked QBE to come clean on which parts of Australia were currently and would soon become uninsurable due to the impacts of global warming.

QBE CEO Pat Regan admitted that there were parts of Australia where insurance was becoming unaffordable due to the climate crisis. He said there was a role for the insurance sector to play together with government, in building the resilience of communities as the impacts of global warming worsen.

QBE aligning underwriting and investment with Paris?

A representative of Australian Ethical, which had co-lodged the resolution on oil and gas exposure, wanted to know if QBE used any criteria to determine whether to insure oil and gas projects. Chairman Wilkins said that all underwriting and investment was assessed against ESG principles, Paris Agreement alignment and the first of the Principles for Sustainable Insurance.

Considering even some existing oil and gas extraction projects can’t reach their full potential to limit warming to 1.5 degrees, has QBE just ruled out insuring new oil and gas projects? Clarification is necessary. Hear the full exchange below.

Warragamba Dam raising concerns aired

QBE also faced a number of questions, including from traditional owners, regarding the Insurance Council of Australia’s support for the raising of the Warragamba Dam wall and QBE’s lack of a World Heritage policy. You can read more about that here.

Take action. Ask QBE to phase out its oil and gas exposure, like it is doing for thermal coal: