Suncorp has announced it will stop investing in oil and gas projects by 2040. Campaigners say it's a good start – but it can do better.

Suncorp is getting out of new oil and gas exploration as well as production. (Carolyn Cole, Los Angeles Times via Getty Images)
  • Suncorp has announced it will stop insuring oil and gas projects over the next five years, and will end direct investment by 2040.
  • The policy leaves QBE as the last Australian-based insurer to be exposed to gas fields.
  • However, while environmentalists welcomed the move, they have pointed out there are still sizeable gaps in Suncorp’s policy.
  • Visit Business Insider Australia’s homepage for more stories.

Australia’s fifth-largest bank is making a total exit from fossil fuels as it contemplates its future.

On Friday, Suncorp announced it would cease investing in and insuring in oil and gas projects over the next five years, and be completely out of direct investment by 2040.

“This builds on our commitment to phase out of existing thermal coal by 2025,” Suncorp wrote in its responsible business report, released as part of its full-year financial results.

“We remain committed to investments in renewable energy infrastructure and low-carbon solutions that deliver both financial and environmental outcomes.”

As the largest general insurer in the country, it’s one of the strongest divestment commitments to e made by a major Australian financial institution.

However, while fossil fuel divestment activists Market Forces welcomed the policy, it noted it’s not perfect.

“While this new guideline has significant gaps, that is, it doesn’t address oil and gas pipelines nor gas-fired power stations, it is a great step forward for Suncorp which puts it ahead of many other insurance companies worldwide,” campaigner Pablo Brait said.

“With this new policy Suncorp has sent a clear message to its customers, shareholders and the Federal Government, that it will not be a part of any expansion of dirty gas production.”

While the announcement was welcomed, in truth it boils down to a relatively small change by the insurer and bank.

“As of 30 June 2020 fossil fuel extraction and electricity generation activities made up less than 0.01% of general insurance gross written premium,” Suncorp’s results show.

It’s also less than 0.5% of its insurance and shareholder assets and less than 1.5% of its total assets under management.

Still, it puts increasing pressure on other financial institutions to do better.

“QBE is now isolated as the only Australia-based insurer willing to insure new climate-destroying gas fields and highly polluting tar sands oil,” Brait said.

“With global warming-fueled extreme weather hitting insurance company profits it makes no sense for QBE to continue to support polluting industries.”


Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.