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Berkshire Hathaway Specialty Insurance
Berkshire Hathaway Specialty Insurance

And again: QBE shareholders reject fossil fuel action demand

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QBE shareholders today again overwhelmingly rejected a resolution demanding the insurer set out targets to reduce its risk exposure to fossil fuel industries.

The vote at today’s AGM repeated the defeat of a similar resolution at last year’s meeting made by climate activist group Market Forces, with backing from shareholder Australian Ethical.

In order for the climate resolution to be raised at the AGM, shareholders must first approve a special resolution to change the company’s constitution. About 87% of votes cast were against the proposed amendments to the constitution.

The climate resolution wants QBE to disclose short, medium and long-term targets to reduce investment and underwriting exposure to oil and gas assets, along with plans for meeting them. It says the targets should be consistent with the climate goals of the Paris Agreement and the information should be published annually, starting with the 2021 annual report.

QBE had recommended that the resolution be rejected as the insurer has already committed to a set of actions that it says will reduce its fossil fuel exposure.

“I want to be very clear,” Chairman Mike Wilkins said in his address at the AGM. “Climate change is a material risk for QBE and we believe we must play a part in the global response to this challenge.

“We have already committed to setting metrics and targets to measure and monitor climate-related risks and opportunities this year.

“The targets will be portfolio-wide – not just confined to oil and gas as the proposed resolution asks – and they will be published in our 2020 annual report, one year earlier than the timing described in the proposed resolution.”

CEO Pat Regan told shareholders actions taken in recent weeks to strengthen the insurer’s capital base, such as the $US750 million ($1.2 billion) equity placement, will help the business to weather the fallout caused by the coronavirus pandemic.

“We have made responsible and prudent choices to put in place a comprehensive capital plan to protect the strength of our business in response to the current economic crisis,” Mr Regan said.

“While the road ahead remains very uncertain, QBE confronts the challenges ahead from a position of strength.”