#Performance highlights
$324m
in social and low carbon impact investments
98%
of total assets under management (AUM) covered by Responsible Investment Policy
99.5%
proxies voted
#Delivering responsible banking and insurance
Suncorp is a signatory to the United Nations 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. During the year we completed our first and second self-assessments against the Principles for Responsible Banking.
Suncorp’s Responsible Banking & Insurance Policy outlines how we integrate environmental, social and governance (ESG) considerations into the way we do business. This commits us to delivering products and services that are suitable, accessible and affordable, as well as remunerating and incentivising with customers’ best interests in mind.
#Ensuring a responsible value chain
Suncorp’s Responsible Investment Policy incorporates environmental, social and governance considerations into investment manager selection and the evaluation of investment risks and opportunities. The Policy outlines our criteria for investments, our approach to impact investing and the governance of proxy voting activity.
Suncorp also ensures strong governance of procurement activities and is managing the environmental and social risks and opportunities in our supply chain. Our Corporate Responsibility Principles are embedded in our Procurement Policy and Supplier Code of Practice for our Australian operations.
#Portfolio-level assessments
In FY21, Suncorp used guidance from the United Nations Environmental Programme Finance Initiative to assess portfolio-level ESG risks and opportunities in our banking, investment and insurance portfolios. This included an assessment of potential modern slavery risk and our exposure to sensitive sectors. The outcomes of these assessments are being used to inform future policy development.
#Investing responsibly
In 2019 Suncorp became a signatory to the United Nations Principles for Responsible Investment, an international network of institutional investors that works to understand the implications of ESG factors.
Climate change is integrated in Suncorp's Responsible Investment Policy, which incorporates the Paris Agreement on climate change. The Responsible Investment Policy requires managers to incorporate a shadow carbon price in their analysis of investment opportunities. The shadow carbon price is set according to a path that is consistent with the aim of the Paris Agreement to keep global temperature rise this century well below 2˚C. The shadow carbon price is reviewed every year and in FY21 it was increased to US$38 per ton CO2e.
Impact investing
Suncorp proactively engages in social impact investing that meets both our investment and social impact assessment criteria. Our investment in the Youth Connect Social Benefit Bond supports vulnerable young people transitioning from state-based care to independence in the community. The first group of young people completed the program this year, with the percentage of successful graduates exceeding the program’s baseline performance benchmark.
In FY20, Suncorp invested in the Synergis Disability Housing Fund, which aims to address the undersupply of housing for people living with a disability in Australia. In FY21, the Fund completed construction and moved tenants into housing in Queensland and New South Wales and began housing construction projects in Victoria.
Suncorp’s commitment to the Palisade Renewable Energy Fund became fully drawn down over FY20. In FY21, Palisade completed the Granville Harbour Wind Farm in Tasmania and purchased the Snowtown Wind Farm 2 in South Australia.
Proxy voting governance and activity
Suncorp is committed to ensuring all proxies are voted in a manner consistent with Suncorp’s Responsible Investment Policy and Corporate Responsibility Principles.
During FY21, Suncorp voted on 99.5% of eligible proxy resolutions, voting at 329 meetings on 2,767 resolutions in 21 countries.
#Sensitive Sector Guidelines
Suncorp has a range of guidelines to ensure consistent decision making across our investment, banking and insurance portfolios on issues including fossil fuels, tobacco and recreational cannabis, and controversial weapons.
In 2020, we strengthened our Fossil Fuels Sensitive Sector Guideline so Suncorp’s businesses will not directly invest in, finance or underwrite new thermal coal mining projects or electricity generation, or new oil and gas exploration or production. This year, these guidelines were formally documented as Sensitive Sector Standards, enabling us to respond to environmental and social risks in our business and support the implementation of our Responsible Investment and Responsible Banking & Insurance policies. Suncorp has a target to phase out existing thermal coal exposures by 2025, as well as phase out underwriting oil and gas by 2025.
Suncorp will phase out of directly investing in oil and gas by 2040 by:- immediately avoid the top 10% by kg CO2 per barrel of oil equivalent
- the top 25% by 2025
- the top 50% by 2030
- phase out of all oil and gas exploration and production by 2040.
We will continue to avoid any company involved in tar sands, or oil and gas exploration or production inside the arctic circle or the Great Australian Bight.
As at 30 June 2021, fossil fuel extraction and electricity generation activities made up less than 0.1 per cent of general insurance gross written premium. Fossil fuel exposure is less than 0.3 per cent of our insurance and shareholder investment assets. Suncorp's commercial lending portfolio has no exposure to fossil fuels via either extraction or power generation.
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.
Suncorp will seek to increase exposure to businesses that have a positive environmental impact, including renewable energy generation and technology. The transition to a net-zero emissions economy offers commercial opportunities to grow our business while at the same time supporting environmental objectives.
Under our Tobacco and Controversial Weapons Guidelines, we continued to exclude tobacco, recreational cannabis, land mines, cluster munitions, biological and chemical weapons from our portfolios. From 1 July 2021, Suncorp expanded the definition of controversial weapons to include white phosphorus and depleted uranium munitions. We also updated our excluded positions list to capture companies involved in the production, sale or distribution of recreational cannabis products.
Suncorp will review this approach annually. This includes annual review of exposures, current and potential economic and policy change, and the application of a shadow carbon price.
