23 October 2020
Amidst ever-worsening extreme weather and the hits to their bottom lines it is causing, two of Australia’s three big insurers faced shareholders at their annual general meetings this week. Over the last 18 months both have taken significant steps away from supporting coal, oil and gas in their underwriting (insurance) and investments due to the contribution of these polluting industries to the climate crisis and therefore the aforementioned extreme weather. However, under questioning from shareholders, neither addressed how it would close the remaining gaps in these fossil fuel policies.
Suncorp still open to insuring oil and gas pipelines and gas-fired power stations
Back in 2019, Suncorp announced it would phase out its underwriting exposure to thermal coal by 2025, a move which was complemented this year with a similar commitment on oil and gas. Investment exposure to oil and gas companies would be progressively phased out, based on the emissions intensity of the producer, reaching zero by 2040.
This policy leadership contains a major gap; the underwriting and investment exposure restrictions and phase-outs only cover oil and gas producers, not pipelines or gas-fired power stations. Unfortunately when this issue was raised at Suncorp’s annual general meeting, the Chairman Christine McLoughlin gave a stock answer, repeating Suncorp’s existing commitments but not addressing the question which remains unanswered – when will Suncorp rule out underwriting fossil fuel pipelines and gas-fired power stations?
IAG’s fossil fuel investments keep falling, despite a lack of target
IAG has declared that by 2023 it will stop insuring companies with more than 30% revenue from fossil fuel extraction or more than 30% of electricity generated from fossil fuels. Over the last three years, it has also seen the carbon footprint of its investment portfolio continue to fall.
Despite these positive steps, IAG has consistently refused to set tangible targets and timelines for getting its fossil fuel exposure to zero, which risks its exposure rising in the future. When asked about this at its AGM this morning, the Chairman Elizabeth Bryan sought to reassure shareholders that the continuing fall in the carbon footprint of its investment portfolio was a goal of both the management and board of IAG, and that this commitment was what would ensure fossil fuel exposure would not go back up.
IAG drops support for Warragamba Dam proposal
In a major victory for shareholders coordinated by the Colong Foundation for Wilderness and the Gundungurra Traditional Owners, the IAG Chairman announced at the beginning of the AGM that the company was dropping its support for the raising of the Warragamba Dam wall. A shareholder resolution on this topic was subsequently withdrawn. The main reason for this change of position seems to be the risk to Gundungurra sacred sites which could be destroyed by flooding if the proposal goes ahead, as well as habitat destruction.
QBE still isolated on oil and gas support
Despite Suncorp and IAG’s refusal to address the glaring gaps in their climate policies, both insurers are still far ahead of competitor QBE, which continues to be open to insuring expansionary oil and gas projects – including the particularly polluting and destructive tar sands and unconventional gas (fracking) industries.
This puts QBE completely at odds with the climate goals of the Paris Agreement and its own interests as an insurance company.
Take action: ask QBE to catch up to its competitors and rule out insurance for climate-destroying oil and gas.