Environmental campaign group Market Forces today lodged a resolution on behalf of more than 100 IAG shareholders, calling on the insurer to set a timetable to reduce its investment exposure to fossil fuels.

Market Forces says IAG is now the only major insurance company in the country with no timetable for ending thermal coal investments, and that objectives contained within its Climate Action Plan are not clear enough.

However, IAG told insuranceNEWS.com.au today it has “a proud and longstanding record of action on climate change” and that rapid progress is being made.

Market Forces says IAG’s increased provisioning for natural perils shows the impact of global warming on the group.

“For financial year 2020, IAG has set the natural peril allowance at $641 million, an increase of around 100% over the past decade,” campaigner Pablo Brait said. “However, even these allowance increases have been insufficient.

“IAG’s shareholders and customers are feeling the financial impacts of the climate crisis, while at the same time their company is investing in the dirty industries fuelling it.”

Market Forces says investors are not able to determine IAG’s coal, oil and gas investment exposure, or its expected trajectory, because terms used in its Climate Action Plan are “undefined and ambiguous”.

But an IAG spokesman told insuranceNEWS.com.au the group’s investment portfolio has “very limited exposure to higher risk companies”, as defined under Morgan Stanley Capital International’s Low Carbon Reduction criteria.

“These represented just 0.13% of our investment portfolio at 30 June 2019, and a clear trend has been established with this representing a 70% reduction on the proportion only two years earlier.”

IAG says it contributes to “sector-wide climate solutions” through the United Nations Environment Program – Finance Initiative Principles for Sustainable Insurance, Principles for Responsible Investment and membership of the Geneva Association.

“We’ll continue to take a leadership and advocacy role on climate change through our work with the federal, state and local governments in Australia and New Zealand, such as through the implementation of the National Disaster Risk Reduction Framework, and as a founding member of the Australian Business Roundtable for Disaster Resilience & Safer Communities."

The spokesman says IAG has been carbon-neutral since 2012 “and [we] have reduced our emissions by almost 25% since 2015”.

“Our Climate Action Plan scorecard, which we launched at our 2018 AGM, clearly sets out our commitments and actions to mitigate the impacts of climate change across five key areas, with executive accountability for each action.”

The resolution says: “Shareholders request that the company disclose measurable and verifiable short-, medium- and long-term targets to reduce investment exposure to fossil fuel (oil, gas, coal) assets, along with plans and progress to achieve the targets set.

“These targets should be consistent with the Paris Agreement’s goal of limiting the increase in global average temperatures to well below 2°C above pre-industrial levels and pursuing efforts to limit the increase to 1.5°C. This information should be published annually, starting with the financial year 2020 investor report.”