Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance

Environmental Achievements

• Carbon emissions reduction 7% from 2016

Social Achievements

• Included as a member of the 2018 Bloomberg Gender‑Equality Index
• QBE leadership academy 2,573 graduates in total
• Charities supported 350+

Governance Achievements

• Launched the world’s first Gender Equality Additional Tier 1 (“AT1”) bond

Climate Goals & Targets

Environmental Challenges

• Heavy catastrophe losses
• Material decline in the performance of emerging markets businesses
• Unprecedented level of natural catastrophe claims
• Higher attritional claims
• Reduced favourable prior accident year claims development
• Ogden decision in the UK
• Deterioration in Asia Pacific Operations due to lapse in underwriting discipline
• Heightened attritional claims activity

Mitigation Strategies

• Refreshed leadership and a clear plan for a simpler footprint and improved performance
• Prompt action taken when declining performance became evident
• Two separate operating divisions formed to facilitate a more granular focus on each of the Asia Pacific and Latin American regions
• Detailed performance improvement plans developed for Asia Pacific Operations
• Decision to exit Latin America
• Strengthening of claims provisions by more than $100 million in the second half
• Reinsuring the division’s commercial auto runoff liabilities
• Improved pricing and risk selection in a number of key portfolios
• Implementation of cell performance review discipline
• Specific remediation initiatives, particularly in Asia Pacific and North American Operations

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Unpredictable and potentially more severe weather events

Transition Risks

• Legal, policy, investment risks due to global shift towards lower-carbon economy

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance

Environmental Achievements

• Achieved carbon neutrality in 2018 through emissions reduction and offsetting.
• Committed to reducing air travel by 20% by 2021.

Social Achievements

• Inclusion in the top 200 companies in the Equileap 2018 Gender Equality Global Report & Ranking and on the Bloomberg Gender-Equality Index.
• Increased female representation in senior management to 32% (a 2% increase from 2017).
• Launched QBE DNA, a new set of cultural elements emphasizing customer-centricity, technical excellence, diversity, and collaboration.
• Launched the QBE Champions of Change network focused on diversity and inclusion.

Governance Achievements

• Strengthened Group Board and Committee oversight of climate-related issues.
• Established a senior Climate Change Working Group.
• Signed TCFD Statement of Support.
• Established ESG Risk team to coordinate integration of climate-related risks and opportunities.
• Reviewed Enterprise Risk Management Strategy and Framework to reflect climate change considerations.
• Released updated Code of Ethics and Conduct and provided global training.
• Implemented a new whistleblowing system (QBE Ethics Hotline) and provided global training.

Climate Goals & Targets

Environmental Challenges

• Above-average catastrophe incidence in 2018 (hurricanes, wildfires).
• Competitive insurance markets in Asia.
• Brexit challenges.
• Regulatory scrutiny of the Australian financial services sector (Royal Commission).

Mitigation Strategies

• Portfolio rationalization and simplification (exiting underperforming markets and portfolios).
• Implementation of the Brilliant Basics program to improve underwriting, pricing, and claims management.
• Rigorous performance management through cell reviews.
• Cost reduction program targeting $130 million (net) in savings over three years.
• Establishment of a fully operational insurance and reinsurance company in Belgium to address Brexit.
• Working closely with governments and regulators to address Royal Commission recommendations.

Supply Chain Management

Responsible Procurement

• Supplier Sustainability principles promoting human rights compliance and diverse workforces.

Climate-Related Risks & Opportunities

Physical Risks

• Floods, bushfires, tropical cyclones, hail, storms, coastal inundation, droughts, sea level rises, heat waves.

Transition Risks

• Impact of climate change and energy policies on operations and clients.
• Changes in insurance needs of energy clients undergoing transition.

Opportunities

• Development of energy-efficient products and services.
• Investment in renewable energy and green finance (Premiums4Good).

Reporting Standards

Frameworks Used: TCFD

Awards & Recognition

• Impact Asset Owner of the Year at the Australian Impact Investment Award (Premiums4Good).

Environmental Metrics

ESG Focus Areas

• Climate Change
• Sustainability
• Risk Management
• Diversity & Inclusion
• Financial Inclusion

Environmental Achievements

• Achieved carbon neutrality in 2019
• Set a target to use 100% renewable electricity across operations by 2025 (63% achieved in 2019)
• Zero direct financial investment in thermal coal from July 1, 2019
• Committed to phasing out all direct insurance services for thermal coal customers within the next decade
• Launched disaster relief and climate resilience partnerships with Red Cross and Save the Children

Social Achievements

• Launched 'Share the Care' program in Australia and New Zealand for equal parenting leave
• Improved employee engagement by 4% (QBE Voice employee survey)
• Increased female representation at senior management to 34%
• Joined the Financial Inclusion Action Plan (FIAP) program in Australia
• Pledged A$500,000 to bushfire support and recovery services

Governance Achievements

• Improved overall ranking in the Dow Jones Sustainability Index (DJSI)
• Maintained inclusion in the DJSI Australia Index
• Enhanced climate change disclosures in line with TCFD recommendations
• Improved score for corporate transparency and action from CDP (B rating)
• Published Group Energy Policy
• Established ESG Risk team
• Strengthened risk appetite statements and refreshed risk policies
• Implemented 21 initiatives to address findings of Self-Assessment on Governance, Accountability, and Culture
• Updated Group Governance Framework and Executive Governance Framework
• Revised Policy Governance Framework
• Updated QBE Code of Ethics and Conduct
• Updated Group Whistleblowing Policy
• Reviewed and updated Group Sanctions, Anti-Bribery and Corruption and Priority Data Breach policies

Climate Goals & Targets

Environmental Challenges

• Unusually poor weather conditions in parts of the US adversely affected the financial performance of the North American Crop business
• Heightened industry-wide claims inflation in specific US and European casualty portfolios
• Higher than expected large individual risk claims
• Significant catastrophe events (Townsville floods, storms in NSW and Queensland, bushfires across Australia)
• Slowdown in Australian home lending impacting LMI business
• Regulatory and legislative reforms in Australia following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

Mitigation Strategies

• Portfolio de-risking initiatives since 2017
• Resetting the Group’s reinsurance program
• Continued improvement in the attritional claims ratio through cell reviews and Brilliant Basics
• Premium rate increases
• Operational efficiency program targeting gross cost savings of more than $200 million by 2021
• Asset sales and portfolio exits to reduce complexity
• Implementation of Brilliant Basics underwriting and claims initiatives
• Enhanced risk selection and claims management initiatives
• Disciplined lending practices in LMI portfolio
• Participation in consultations on the proposed Financial Accountability Regime and APRA draft Prudential Standard CPS 511 Remuneration

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Bushfires
• Tropical cyclones
• Hail
• Storms
• Coastal inundation
• Sea level rise
• Increased heat waves
• Droughts

Transition Risks

• Changes to insurance premiums in declining sectors
• Stranded assets
• Regulatory and reputation risks

Opportunities

• Development of new insurance products
• Investment opportunities in renewable energy and low emissions transport

Reporting Standards

Frameworks Used: TCFD

Awards & Recognition

• Finalist, 2019 Premiums4Good: Ethical Corporation’s global Responsible Business Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Inclusion
• Financial Inclusion
• Sustainable Development

Environmental Achievements

• Increased investments in green, social and sustainability (GSS) bonds, directing financing to renewable energy, energy efficiency, and climate adaptation projects.
• Sydney Light Rail project, projected to reduce greenhouse gas emissions by 663,000 tonnes of CO2 over 30 years.

Social Achievements

• Invested in programs addressing youth homelessness, reducing recidivism, and supporting vulnerable populations globally.
• Supported gender lens investments, directing financing to women-owned businesses and considering the role of women in resilience strategies.
• Invested in programs supporting First Nations People and addressing intersecting disadvantage.

Governance Achievements

• Established a Classification of Social Investments Committee (COSI) with external representatives to oversee Premiums4Good investments.
• Annual limited assurance process conducted by Deloitte as part of QBE’s Sustainability Assurance process.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting the economic and social landscape, creating challenges for service providers and businesses.
• Affordable housing shortages impacting homelessness programs.
• Addressing intersecting disadvantage and supporting stronger futures for vulnerable populations.

Mitigation Strategies

• Made more than USD 100 million in investments supporting private and public sector businesses and programs exposed to the economic and health effects of the COVID-19 pandemic.
• Continued investment in programs despite challenges posed by the pandemic and housing shortages.
• Implemented adaptable service delivery models to maintain support for clients during the pandemic.

Supply Chain Management

Responsible Procurement

• Sydney Light Rail Sustainable Procurement Action Plan, aligning with the Australian Modern Slavery Act 2018.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), Impact Management Project

Third-party Assurance: Deloitte

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 6 (Clean Water and Sanitation)
• SDG 8 (Decent Work and Economic Growth)
• SDG 10 (Reduced Inequalities)
• SDG 11 (Sustainable Cities and Communities)
• SDG 13 (Climate Action)
• SDG 14 (Life Below Water)

Investments aligned with UN SDGs to address pressing social and environmental challenges.

Awards & Recognition

• Re/Insurer of the Year (Environmental Finance IMPACT Awards)
• Sustainability Leadership Award (Finder Awards)
• Green Insurer of the Year, Australia (Finder Awards)

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity, Equity, and Inclusion
• Governance
• Human Rights
• Modern Slavery
• Responsible Underwriting
• Sustainable Investments
• Customer Vulnerability
• Community Resilience

Environmental Achievements

• Met RE100 target, sourcing 100% of electricity from renewable sources (excluding 0.5% of global electricity use due to RE100 Materiality Threshold guidance)
• Reduced Scope 1 and 2 carbon emissions by 80%
• Reduced energy use by 30%
• Reduced air travel by 96%
• Maintained carbon neutrality

Social Achievements

• Launched new global QBE Foundation strategy focused on climate resilience and inclusion
• Increased women in leadership from 34.8% to 35.9%
• Launched digital musculoskeletal pilot for motor claims, allowing claimants access to digital physiotherapy
• Delivered over 5,500 hours of customer-focus training globally
• Implemented Financial Inclusion Action Plan commitments

Governance Achievements

• Refreshed Group definition of 'conduct risk'
• Reviewed Group's approach to conduct management
• Delivered training to all employees on the Group Code of Ethics and Conduct
• Completed 97.4% of annual compliance training requirements
• Published annual Modern Slavery and Human Trafficking Statement
• Published Group Human Rights Policy

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Changing consumer preferences
• Affordability and accessibility of insurance products
• Biodiversity loss
• Cyber security threats
• Modern slavery risks in supply chain
• Human rights risks in high-risk countries

Mitigation Strategies

• Developed alternative sourcing strategies
• Program to deliver value to customers in a responsible way
• Working with governments and contributing to policy discussion to address affordability
• Implementing Environmental and Social Risk Framework
• Global approach to manage cyber security threats
• Implementing Environmental and Social Risk Framework and Third-Party Risk Management Framework
• Implementing Group Human Rights Policy and Modern Slavery Risk and Compliance Standard

Supply Chain Management

Supplier Audits: 75% of new tier one supplier contracts in Australia incorporated Supplier Sustainability Principles

Responsible Procurement

• Supplier Sustainability Principles
• Sustainable Procurement Strategy (Australia Pacific)
• Third-Party Risk Management Framework

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in climate solutions investments

Reporting Standards

Frameworks Used: GRI Standards, core option, TCFD recommendations, UN Global Compact Ten Principles, Principles for Responsible Investment (PRI), Principles for Sustainable Insurance (PSI), RE100

Third-party Assurance: Deloitte Touche Tohmatsu (limited assurance)

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 8: Decent Work and Economic Growth
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 13: Climate Action

Initiatives aligned with the SDGs to build financial and risk resilience, promote sustainable economic growth, reduce inequalities, support sustainable cities, and combat climate change.

Sustainable Products & Innovation

• SolarPro Line-Stoppage insurance
• Parametric platform for analyzing climate-linked risks

Awards & Recognition

• Finder Green Insurer of the Year
• Gold Employer status in Australian Workplace Equality Index
• Various awards for digital solutions and workers' compensation programs

Environmental Metrics

ESG Focus Areas

• Foster an orderly and inclusive transition to a net-zero economy
• Enable a sustainable and resilient workforce
• Partner for growth through innovative, sustainable and impactful solutions

Environmental Achievements

• Sourced 100% renewable electricity for our operations globally (excluding Pacific Islands and Bermuda)
• Achieved a 75% reduction in Scope 1 and 2 emissions since 2018
• Maintained carbon neutrality for defined emissions related to global operations

Social Achievements

• Exceeded target of 40% women on Group Board (reached 44%)
• Achieved 38.6% women in leadership (Levels 0-3), exceeding target of 37%
• Relaunched Global Disaster Relief and Resilience Partnership for another three years
• 99.4% of employees completed mandatory training

Governance Achievements

• Implemented new inclusion targets for 2023 based on ethnicity, disability, and LGBTIQ+ identification
• Developed and rolled out Group-wide training modules on ESG risk, human rights, and climate change risk
• Implemented a Global Consequence Management Policy (to be rolled out in 2023-2024)

Climate Goals & Targets

Environmental Challenges

• Increased Scope 1, 2, and 3 emissions in 2022 relative to 2021 due to a return to business-as-usual operations (increased office occupancy, travel, commuting)
• Challenges in sourcing certified renewable electricity in smaller operations (Pacific Islands and Bermuda)
• Managing the social implications of climate risk and the transition

Mitigation Strategies

• Extended 2030 net-zero commitment to include material Scope 3 emissions
• Implementing energy efficiency opportunities in smaller operations (LED lighting, appliance upgrades, sensors, timers)
• Implementing an updated policy for UK fleet vehicles (hybrid and electric vehicles only)
• Investing in data, systems, and people to estimate and automate the measurement of insurance-associated emissions

Supply Chain Management

Supplier Audits: 91% of new Australia Pacific suppliers comply with Supplier Sustainability Principles

Responsible Procurement

• Supplier Sustainability Principles (SSPs)
• Third-Party Risk Management (TPRM) Policy
• Human rights due diligence approach to supplier modern slavery risk

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Climate Solutions investments

Reporting Standards

Frameworks Used: GRI Standards

Third-party Assurance: PwC

UN Sustainable Development Goals

• 1
• 7
• 8
• 9
• 10
• 11
• 12
• 13
• 16
• 17

Aligned to business activities, Sustainability Framework, and focus areas.

Sustainable Products & Innovation

• Green benefit for Lenders Mortgage Insurance (LMI)

Awards & Recognition

• Australian and New Zealand Institute of Insurance and Finance Environmental, Social and Governance (ESG) Change Award
• Green Insurer of the Year (Finder)
• Organisational Development Award (AHRI Awards)
• Three Insurance Asia Awards (QBE Asia)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social

Environmental Achievements

• Supported projects contributing to a reduction of emissions equivalent to 224,143 tonnes of CO2 per year in Denmark (NextGenerationEU Green Bond)
• Supported projects increasing clean energy capacity by approximately 1360 megawatts (MW) in Canada (Government of Canada Green Bond)

Social Achievements

• Resolve Social Benefit Bond: 68% reduction in hospital bed days, 54% reduction in hospital admissions, 30% reduction in average length of stay, and 40% reduction in emergency department visits in Australia.
• Kāinga Ora Wellbeing Bond: Created 200 new affordable homes in New Zealand with on-site support; 9.8% of the contract for Te Mātāwai development went to Māori or Pasifika-owned businesses.
• Motability Operations Social Bond: Supported over 750,000 customers in the UK with affordable transport solutions; 48,000 EVs on the scheme by HY24.

Governance Achievements

• Premiums4Good investment eligibility assessment and classification are made through an internal framework and confirmed by the Classification of Social and Environmental Investments (COSEI) Committee (composed of QBE representatives and independent advisors).

Climate Goals & Targets

Environmental Challenges

• Slight decrease in the value of Premiums4Good investments year-on-year, predominantly reflecting market conditions and lower availability of suitable assets.

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers Australia (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Investments align with the United Nation's Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed