Major Australian insurer Suncorp will end any financing or insuring of the oil and gas industry by 2025, adding to the group’s existing ban on support for new thermal coal projects.
The insurer revealed today it had already stopped insuring, underwriting or directly investing in new oil and gas projects and would phase out underwriting and financing existing oil and gas businesses by 2025.
All direct investing in the oil and gas sector would end by 2040, the company said in a report.
Suncorp said the move built on its commitment last year to end any backing of thermal coal projects.
In the company’s sensitive sector guidelines, Suncorp’s external investment managers were asked to apply a shadow carbon price as they looked at investment opportunities “to manage the risk of stranded assets as we transition to a net-zero emissions economy”.
At the end of June, the company said fossil fuel extraction and generation made up less than 0.1 per cent of its general insurance business.
Among its insurance and shareholder investment assets, exposure was below 0.5 per cent, and was less than 1.5 per cent of all the investments it managed.
“Suncorp will continue to underwrite, lend to and invest in companies whose business is clearly consistent with the transition to a net-zero emissions economy by 2050,” the report said.
Current investments in low carbon industries stood at $236m at the end of June, the company said.
Insurance companies globally are introducing internal guidelines restricting their exposure to fossil fuels.
At least four insurers of Australia’s controversial Adani coal mine have backed away from the project.
In 2019 Suncorp said it would not finance or insure new thermal coal mines and power plants and would not underwrite existing thermal coal projects after 2025.
Market forces campaigner Pablo Brait said Suncorp’s announcement still left “significant gaps” because it didn’t address pipelines or gas-fired power stations.
However, he said it was “a great step forward” and put the company ahead of many other insurers around the world in moving away from fossil fuels.
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