A $17 billion Australian insurance giant has joined the ranks of banks and financial services companies who pledged to cut their exposure to the thermal coal sector, in line with the goals of the 2015 Paris climate agreement.
Suncorp, which owns insurance brands AAMI and GIO, said it will no longer insure new thermal coal mines and power plants, and will not underwrite any existing thermal coal projects after 2025 – a pledge, activists said meant there were now no Australian insurers willing to underwrite new thermal coal developments.
A Suncorp official said the company responded to the financial and strategic risk posed by climate change by materially reducing its investment in fossil fuels, including thermal coal, and by seeking to increase exposure to businesses that have a positive environmental impact, including renewable energy generation and technology, The Guardian reported.
The company made the pledge after it was hit by a 45% slump in half-year profits, mainly owing to extreme weather events in Sydney and Queensland. Suncorp also announced in February that it increased its allowance for natural hazards by $100m and to buy another $200m of reinsurance cover.
Environmental lobby group Market Forces welcomed Suncorp’s move but urged the insurer to go further.
“Without action on oil and gas there is a risk that Suncorp ends up trading one massive climate risk for another over time,” Campaigner Pablo Brait said in The Guardian report.