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Suncorp continues to divest from fossil fuels

20 September 2018

20 September 2018

Today Suncorp demonstrated it has climate change firmly on its agenda and confirmed it continues to divest from fossil fuels. The company is one of Australia’s largest insurance providers, a sector recognised as highly exposed to the physical risks posed by climate change, such as weather-related catastrophes. Earlier this year, Suncorp released its Climate Change Action Plan (CCAP) and although comprehensive, it failed to set clear, tangible targets or timelines for key climate risk disclosure elements. Shareholders attended Suncorp’s annual general meeting (AGM) today to see if the company had defined these targets six months down the track.

Chairman Ziggy Switkowski began question time by addressing a series of climate-related questions directed to the company by shareholders prior to the AGM. He also acknowledged the role that Market Forces has played in bringing climate issues to light.

At the 2017 AGM chairman Switkowski had made a commitment to shareholders that Suncorp’s exposure to fossil fuels would be ‘immaterial’ within two years. This year Switkowski explained how the company’s responsible investment policy has seen it exit some emissions intensive investments. Watch below.

Floods, fires, cyclones and other natural disasters have cost Suncorp $2 billion in the last decade. In the first half of FY 2018  Suncorp suffered a 15.83 % drop in profits, with natural hazards claims $65 million above its allowance for the period. A surge in these types of natural disasters has forced the company to increase its natural hazards allowance by $28 million. As a result, insurance premiums for Suncorp customers have risen by 3-5 %.

Clearly, Suncorp needs to seriously assess the risks it faces from a changing climate. The company told shareholders that it will begin conducting analysis of its own climate risk in FY2019, but it’s unclear when we will see that analysis released.  And while it’s evident that Suncorp is serious about assessing climate-related risks it’s disappointing that they still haven’t given any concrete date for disclosing their scenario analysis.

Analysing risks is Suncorp’s business, and with rising premiums, increasing natural hazard allowances and growing legal ramifications it should be well aware of the consequences if it fails to do the necessary work and produce a 2 degrees scenario analysis.