Continued to implement our Climate Change Action Plan
On track to meet targets to reduce Scope 1 and Scope 2 GHG emissions
Continued to reduce our exposure to thermal coal and oil & gas
Suncorp conducts business in a way that protects and sustains the environment. We are continuing to reduce our environmental impact and be transparent about our environmental performance.
Suncorp continues to integrate climate change considerations into governance, risk management and strategy processes in line with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) framework. We are committed to reducing our GHG emissions, preparing for the physical impacts of climate change and supporting the transition to an economy that achieves net-zero emissions by 2050.
#Climate Change Action Plan
In FY21, we continued to deliver against our CCAP through managing climate-related risks and opportunities across the business, while proactively reducing our own environmental footprint. The next phase of development of our CCAP will be released in the first half of FY22. As we move to further embed our response to climate risk and opportunities across our business, the next version of our CCAP will support our people, business and customers to adapt to the latest developments in climate policy and intelligence both globally and domestically.
Our actions for managing climate-related risks and opportunities and proactively reducing our environmental footprint.
#Advocating for natural hazard resilience
Suncorp recognises the need to build more resilient communities in response to climate impacts and a growing population in disaster-exposed regions.
Suncorp’s natural hazard resilience efforts combine innovative research and insights with initiatives that raise awareness of disaster preparedness in the broader community, as well as market-leading product solutions to recognise our customers’ investment in increasing the resilience of their homes. During the year, Suncorp’s key natural hazard resilience activities included the One House initiative to design, prototype and test one of Australia’s most resilient homes, and the introduction of the Build it Back Better feature for Suncorp home insurance customers who make a claim.
In 2021, Suncorp is launching a dedicated grants program to support Australian communities impacted by significant natural disasters in their long-term recovery and resilience building. Suncorp has partnered with the Foundation for Rural & Regional Renewal (FRRR) as it has the reach, relationships, networks, and know-how to distribute grants, big and small, to community-led solutions that build resilience and long-term viability of smaller remote, rural, and regional communities across Australia.
These grants will enable communities to repair or replace their infrastructure and equipment in a more resilient way and increase their capability and capacity to respond and recover from future extreme weather events.
#Collaborating for action
Suncorp is a signatory to the Principles for Responsible Investment, Principles for Sustainable Insurance and Principles for Responsible Banking, international frameworks committed to driving collective action and sustainable practices across the finance sector.
Suncorp also works with and participates in industry initiatives to address climate change including Climate Measurement Standards Initiative, Insurance Council of Australia Climate Change Action Committee, Business Council of Australia Adaptation and Resilience Working Group, ABA Sustainability Working Group and the Actuaries Institute Climate Change and Affordability Working Group. Suncorp is also collaborating with the newly established Minderoo Foundation Wildfire and Disaster Resilience Program.
Suncorp New Zealand is a member of the Sustainable Business Council and the Climate Leaders Coalition.
#Summary of TCFD disclosures
Suncorp continues to integrate climate change considerations into governance, risk management and strategy processes in line with the Financial Stability Board’s Task Force on Climaterelated Financial Disclosures framework (TCFD), of which Suncorp became a signatory to in 2018.
Suncorp has conducted climate scenario analyses over the past three years, building sophistication in line with industry guidance and developments in scientific research. Suncorp will continue to conduct analyses and these outputs will be integrated into Suncorp’s strategy, which focuses on both investing in and advocating for improved resilience and adaptation to climate change. Further detail on Suncorp’s climate-related financial disclosures can be found in the TCFD section of the Annual Report.
Governance of climate change is the responsibility of the Suncorp Group Limited and Suncorp New Zealand Boards, which oversee the response to climate change risks and opportunities through Board Risk Committees. Key strategic and financial risks, including climate change, are identified during the annual business planning process and a response is considered at least on a quarterly basis through
reporting to Board Committees. Topics presented to Executive Leadership Team and Board for decision or review in FY21 have included:
— Outcomes of physical risk scenario analyses for Insurance (Australia) (motor & commercial), Suncorp New Zealand (home), and Suncorp Bank (business banking)
— Outcomes of transition risk scenario analyses for our Insurance (Australia) (motor, commercial, statutory), Suncorp New Zealand (investments), Suncorp Bank (business banking), and investments
— Internal climate change-related policies, risk appetite and external targets
Suncorp takes a holistic view of climate change impacts – physical, transition, second order and compounding effects – recognising there are significant long-term financial and strategic risks that we address through our CCAP and risk management. Climate change does not increase the number of risks managed by Suncorp, but can increase the impact of risks that are already managed through the Enterprise Risk Management Framework.
Climate change poses both a strategic and a financial risk to the business over the medium to long term. While there are significant risks to manage, there are also opportunities for Suncorp in risk management and the diversification of revenue through supporting the transition to a net-zero emissions economy.
Calculating and managing risk is core business for Suncorp. Each year we augment this core capability by conducting climate change scenario analysis to understand emerging issues and potential strategic impacts on our various portfolios, in addition to hazard and catastrophe risk modelling. We utilise the latest industry guidance and expertise of in-house scientific and actuarial experts, as well as expertise from external partners and scientific organisations such as the CSIRO, Australia’s Bureau of Meteorology and New Zealand’s National Institute of Water and Atmospheric Research.
The focus of scenario analysis evolves year-on-year to ensure a whole of portfolio view of risks can be established. We also recognise climate change modelling and analysis present high levels of uncertainty and this influences our approach to managing risk and shaping strategy.
#Metrics and targets
Managing and reducing our environmental footprint is a core commitment of our CCAP and is driven by our Environmental Performance Plan. In 2019, Suncorp set a science-based target for scope 1 and scope 2 greenhouse gas emissions reduction of 51 per cent in absolute emissions by 2030 and achieving net-zero emissions by 2050 based on a 2017–18 baseline.