Australian climate campaign group Market Forces recently lodged a shareholder resolution demanding that Australian insurance group QBE sets targets to reduce its investment in and underwriting exposure to coal-linked business. However, the insurer claims that its ongoing climate change action programme shows that it is committed to tackling the threat.
The resolution, which was submitted with the support of wealth manager Australian Ethical, needs the support of at least 100 shareholders for it to be taken up at the QBE annual general meeting in May. “Disclosure is not enough,” Market Forces member Pablo Brait said. “QBE also needs to manage and eliminate its climate risks.”
Australian Ethical wants QBE to match its peers in addressing the climate challenge, and Brait cites QBE’s ‘approach to climate change’ as ‘a clear case of corporate masochism’. A QBE spokesperson told insuranceNEWS.com.au that the company sees climate change as a ‘material business risk’ and supports ‘both the Paris Agreement and the goal of limiting global average temperature increases to well below two degrees Celsius’.
The spokesperson explained that the business intends to implement the G20-backed Task Force on Climate-related Financial Disclosures (TCFD) recommendations, as per the insurer’s 2018-2020 climate change action plan, which it provided last week. These include actions in governance, strategy and risk management, and plans to develop short, medium and long-term targets in line with the Paris Agreement.
“Consistent with our climate change action plan,” said the spokesperson, “during [this year] we are completing detailed analysis of climate-related risks and opportunities in priority underwriting portfolios, followed by a review of our underwriting strategy.”
QBE is involved with The UN Environment Program Finance Initiative, which aims to develop analytical tools for climate scenario analysis consistent with the TCFD recommendations. In turn, these will inform the subsequent development of targets to manage QBE’s risk, consistent with its published plan. An additional internal review has also revealed that QBE has less than one per cent of its investment portfolio in coal-related assets.
However, Head of Ethics Research Stuart Palmer said: “Underwriting or investing in new fossil fuel infrastructure today will warm the planet for decades to come.”
Indeed, Market Forces said that the insurer’s actions ‘do not go far enough’. It wants QBE to withdraw entirely from the fossil fuel business: “QBE currently provides insurance for fossil fuel infrastructures, so it actually helps the fossil fuel infrastructures get built by providing insurance, and there is nothing in its climate change action plan or any other documents that stops it from continuing to do that. So it is, as we speak, helping the fossil fuel industry expand, which goes against what needs to happen to limit global warming.”