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Climate COP-out: insurers criticised for supporting oil, gas

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Climate campaigners have criticised QBE and other insurers that continue to provide insurance for oil and gas projects, saying their support for the sector is undermining efforts to limit global warming to 1.5 degrees or lower as set out in the Paris Agreement.

“Insurers are abandoning climate leadership over oil and gas,” Insure Our Future, a coalition of environmental groups, said today in its annual scorecard report on the industry’s level of involvement with the fossil fuel sector.

“Moving away from underwriting oil and gas would not only have benefits for the climate but could also create financial value for insurance companies.

“Despite such incentives, the insurance industry has failed to match its action on coal, and its net-zero commitments, with policies to exclude support for the expansion of oil and gas production and consumption.”

The fifth edition of the scorecard, which Insure Our Future released at the United Nations-backed climate COP26 conference now taking place in Glasgow, analyses the evolving role of 30 leading primary insurers and reinsurers in the fossil fuel sector.

QBE is the only Australian insurer in the list, placing 10th for underwriting with a score of 2.1 out of 10 and 14th for divestment.

Allianz, which strengthened its coal exit policy and added tar sands exclusions, ranks as the insurer with the strongest policies on fossil fuel underwriting this year.

Rounding out the top-10 list is second-place Axa, followed by Axis Capital, Swiss Re, Zurich, Hannover Re, Mapfre, Generali, Scor Re and QBE.

QBE has responded to the scorecard results, saying its Environmental and Social Risk Framework outlines the business’s updated positions on a range of issues, including energy across underwriting and investment.

“This framework also includes the setting of targets that relate to coal, oil and gas and comes into effect from January 1 2022,” a spokesman told insuranceNEWS.com.au.

“QBE has a diverse and international portfolio of customers in the energy sector and we are committed to working with our customers to support their transition to a low carbon economy.

“We play a key role in supporting their transition through developing risk management and insurance solutions for new technologies."

The spokesman says QBE is also a member of the United Nations-convened Net-Zero Asset Owner Alliance and has pledged to achieve net-zero greenhouse gas emissions in its investment portfolio by 2050.

But Pablo Brait of Market Forces, a member of Insure Our Future, says the insurer is a “laggard” when it comes to climate action because of its continued support for oil and gas.

“QBE is a laggard in Australia,” he told insuranceNEWS.com.au.

He says while IAG and Suncorp have taken steps to move away from fossil fuels, there are still “significant gaps” in their decarbonisation polices.

The same can be said for the insurance industry globally despite the moves they have taken in response to the climate emergency, according to Insure Our Future.

“The contradictory way in which insurance companies approach their support for fossil fuels is also expressed in the scores this year,” the scorecard said.

“Companies on top of the underwriting table achieved high scores on coal, but even they scored poorly on underwriting oil and gas.

“Insurers cannot claim to be climate leaders within the corporate sector while they continue to underwrite the expansion of oil and gas.”

Click here for the 2021 scorecard.