Suncorp faced a shareholder resolution during its annual general meeting in Brisbane this week, calling on the insurance giant to disclose targets to reduce investment and underwriting exposure to fossil fuels, in order to align its business with the goals of the Paris Climate Agreement.
“Since insurers are at the frontline of climate change impacts, it’s common sense for them to cut ties with the fossil industries which are fuelling the problem,” said Pablo Brait, Market Forces campaigner. “While Suncorp has taken a positive first step recently on thermal coal, if it wants to claim its business is in line with keeping warming below 1.5 degrees and the Paris Agreement, it simply can’t support the expansion of the oil and gas industries. Suncorp claims its exposure to oil and gas is currently low, but companies like Origin and Santos are licking their lips at the prospect of an unconventional gas boom. Currently, there’s nothing stopping Suncorp increasing its oil and gas exposure massively over time.”
Suncorp rival IAG recently announced it would stop underwriting all fossil fuel extraction and electricity generation by 2023.
Market Forces noted that claims due to natural hazards exceeded Suncorp’s provisioning by approximately AU$1.7 billion over the decade to FY18, impacting the insurer’s bottom line. Suncorp has under-provisioned for natural hazards in eight of the last 10 years and payouts show an increasing trend over time.
“This resolution is intended to ensure Suncorp is acting sufficiently, within its sphere of influence, to manage and mitigate a risk that is already undermining the financial health of the company,” Brait said. “It presents a coherent approach to fossil fuel exposures, which is far better than Suncorp’s current piecemeal approach.”