QBE Insurance to put fossil fuel resolution to shareholders

The coal industry’s biggest insurer has bowed to green groups and given its shareholders a vote on whether it should get out of fossil fuels.

QBE Insurance Group Head Office

QBE Insurance has been forced to put to shareholders a vote on calls for it reduce its underwriting and investment in fossil fuel industries as investors ratchet up pressure on the financial services sector to act on climate change.

A resolution put forward by Friends of the Earth-backed Market Forces and fund manager Australian Ethical would require QBE (QBE) to disclose short, medium and long-term targets for reducing exposure to coal, oil and gas assets, along with its plans and progress to achieve those targets.

The resolution is the latest in a long-running international campaign to reduce carbon pollution by pressuring the financial services industry not to lend to, invest in or insure companies that are responsible for it.

Two weeks ago global commodities miner and trader Glencore caved into pressure from the global Climate Action 100+ group that includes the $140 billion AustralianSuper fund to cap annual coal production 145 million tonnes a year.

Last month, Woodside and Santos said they would also enter discussions with the Climate Action 100+ group to discuss their commitment and accountability on addressing climate change.

QBE is the dominant underwriter of coal in Australia and if it were to follow the lead of European insurers and limit or cut their exposure to the industry it would leave a major hole in the market.

The insurer has also included an amendment to its constitution demanded by Market Forces that is required to enable the resolution, and acknowledges the right of shareholders to seek information or propose resolutions. “However, such a resolution must relate to an issue of material financial relevance and cannot either advocate action which would violate any law or relate to any personal claim or grievance,” the proposed amendment reads.

“Such a resolution is advisory only and does not bind the directors or the company.”

QBE said the proposed climate resolutions had been requisitioned by shareholders representing approximately 0.2 per cent of QBE’s shares on issue.

“QBE’s Board welcomes this dialogue on these important matters and will give the proposed resolutions thorough consideration before providing its recommendations to shareholders,” the company said in a statement to the market today.

Climate change was a “material business risk for QBE” and the steps it was taking to address climate-related risks, including implementation of the recommendations of the Taskforce on Climate-related Disclosures, have been reported in its annual report.