#Delivering sustainable 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.
Suncorp’s Sustainable Insurance Policy and our Responsible Banking 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.
Suncorp is 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. We engage with our external investment managers to ensure climate considerations are integrated into their investment processes and aligned to this policy. To manage the risk of stranded assets in the transition to a net-zero emissions economy, one mechanism used is a Shadow Carbon Price which is provided to our investment managers and is reviewed every year. 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 FY22 it was increased to US$45 per ton CO2e.
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.
#Sensitive Sector Standards
Suncorp has a range of standards to ensure consistent decision making across our investment, banking and insurance portfolios on issues including fossil fuels, tobacco and recreational cannabis, and controversial weapons. These Standards, enable us to respond to environmental and social risks in our business and support the implementation of our Responsible Investment, Responsible Banking & Sustainable Insurance policies.
Suncorp is committed to no longer directly invest in or underwrite new thermal coal mining extraction projects, or new thermal coal electricity generation.
Suncorp is committed to phasing out underwriting and direct investment in thermal coal by 2025.
The phase out applies to companies who derive more than 10 per cent of their revenue from thermal coal extraction or electricity generation, where their business is clearly inconsistent with the transition to a net-zero emissions economy by 2050.
Oil and Gas
Suncorp is committed to no longer directly invest in companies involved in new oil and gas projects including the significant expansion of existing oil and gas assets. Suncorp is also committed to no longer directly underwrite new or additional oil or gas exploration or production.
Further the Group is committed to phase out of any underwriting of oil and gas by 2025.
Suncorp will phase out of its investment exposures to oil and gas exploration and production by:
- immediately avoid the top 10% by metric tonne of CO2 -equivalent /million of USD revenue, based on Scope 1 & 2 emissions
- 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.
Exceptions and exemptions to the Standard
Suncorp will apply an exemption to the Standard so that it can underwrite and invest in those companies whose businesses are clearly consistent with the transition to a net-zero carbon emissions economy by 2050.
Suncorp will continue to invest in and underwrite mining services companies, such as companies who supply catering services to oil and gas operators, or engineering, consultancy and construction companies who are not directly involved in exploration, extraction, or production. Suncorp will also continue to provide insurance to personal and small-to-medium businesses (includes non-fleet motor insurance and Business packages products), and statutory or compulsory insurance such as workers’ compensation, compulsory third-party insurance, and Group Life products in New Zealand.
The Standard for underwriting applies to new polices post 1 June 2019 for direct thermal coal extraction and electricity generation, and 1 July 2020 for direct oil and gas exploration and production exposures.