Group CEO, Pat Regan, Speech to the National Smart Energy Summit
QBE is proud to sponsor this National Smart Energy Summit and to be part of this important discussion about the need to accelerate our transition to a renewable energy future, in Australia and around the world.
Insurers are on the forefront of climate risk. As an industry that financially protects assets and people, and assists in their recovery when disaster strikes, we well understand the risk of increasingly unpredictable and more severe weather-related events. We have an acute understanding of the significant economic and social consequences they will wreak.
QBE has a global perspective on these issues. Since our inception 130 years ago, we have remained a proudly Australian company with our global headquarters just down the road at Chifley Square. However, our operations now span nearly 30 countries, and our diverse portfolio covers everything from property to crop to energy to marine and aviation.
Climate related risks are therefore inherent in every facet of our portfolio and present a material risk for our business.
It is on that basis that QBE has committed to supporting a range of efforts to limit global warming to well below 2 degrees Celsius. We’re taking a number of important steps that I want to address this morning, both in terms of our own operational emissions but also in our role as an insurer and underwriter and as an institutional investor as well.
Your industry - the smart energy industry – is key to our strategy and it is there that I will focus my remarks this morning.
Earlier this year, I was delighted to announce QBE’s participation in the RE100 initiative, with a commitment to source 100 per cent renewable electricity across our global operations by the end of 2025.
The RE100 brings together over 200 of the world’s most influential businesses, who together have a total electricity demand great than Thailand. In fact, if we were a country – we would be the world’s 21st largest electricity user.
QBE is the first – and still the only - Australian headquartered insurance business to join this group.
We have already made good progress towards our goal and I am delighted to announce this morning that since joining in June, we have already met the halfway mark towards our 2025 commitment. 50 per cent of our electricity needs across our global operations now being sourced from renewable energy.
That is a good start. But it will still be challenging for us to reach our 2025 ambition particularly when our aim is to source renewable electricity locally in each of our operations.
Our hope – and that of every RE100 member – is that by publicly committing to a 100 per cent target, we can, in some small way, catalyse investment in this critical industry and accelerate change towards zero carbon grids, at global scale.
Underwriting and investing
Of course, catalysing the growth of the renewables industry requires more than just an increased uptake of energy generated via renewable energy projects. At QBE, we understand the critical role we can play in supporting the industry more broadly.
Earlier this year, we published our Group Energy Policy with a commitment to cease providing direct insurance service for new construction of thermal coal mines, coal power stations or coal transport infrastructure from July this year.
We also committed that we would cease all direct insurance services for the thermal coal industry by 2030, at the absolute latest.
We’re actively seeking to grow our exposure to renewable energy projects through our underwriting portfolio, including here in Australia. We will build on our experience in Asia where we cover solar farms across Vietnam and Korea. And in Europe we work in partnership with GCube, a specialist provider of renewable energy insurance services to wind, solar, biomass, wave, tidal, hydro and energy storage assets owners.
Our Energy Policy also applies to how we invest. We have a $23 billion investment portfolio and form July this year, we reduced our already very low level of direct investment in the thermal coal industry down to zero. This is a position we intend to maintain going forward.
At the same time, we are actively looking to invest more in the renewable energy portfolio. We were one of the early adopters of the infrastructure asset class within the insurance industry, and today our $1bn infrastructure portfolio benefits from a number of direct investments in biomass, solar and wind projects around the world.
And we see enormous potential for further investment in the future.
Our investment team are already actively seeking out opportunities in this space and we are currently talking to a range of fund managers to procure specialist services, capable of delivering the kind of catalytic step change we believe is required in this space.
We also see potential in the possibility of early stage capital deployment in greenfield renewables projects. In the same way that we invest in start-up technology companies through our venture capital fund QBE Ventures, we are now also exploring the potential to help support innovative renewables projects get off the ground. This is early stage thinking, but we are excited about the possibility.
Finally, our Premiums4Good initiative is also making significant investments in a range of renewable projects. Premiums4Good is a unique collaboration between QBE, our customers, partners and our shareholders, through which a portion of customer premiums are channelled into investments that have additional social or environmental benefits.
Investments through our US $633 million portfolio include the Copper Mountain Solar III project, one of the largest photovoltaic solar facilities in the United States. And the European Investment Bank Climate Investment Bond, directing funds to projects across the renewable energy and energy efficiency sectors globally.
To conclude, as an international risk manager, insurance underwriter and institutional investor, we believe we have a significant role to play in supporting an orderly transition to a lower carbon economy.
With our commitment to carbon neutrality and a growing record of action on climate change, we look forward to continuing to work with the renewable energy industry to support the growth and development of this vital sector of the economy.
I look forward to our discussions in the future.