IAG Climate Action Plan
Being in insurance, we see firsthand the devastating impact that a changing climate can have on our customers and our communities. Our focus on climate change goes to the heart of our purpose to make the world a safer place, and that’s exactly why we have an ambition to be a regional leader in tackling climate change.
We have a long and proud history in this space. Since 2003, we have led initiatives aimed at addressing the risks associated with climate change, and we’ve taken practical steps to minimise our own environmental footprint. We’ve been carbon neutral since 2012 and have reduced our carbon emissions by almost 25% since 2015. Our energy efficient offices in Melbourne and Sydney will also help to reduce our emissions further still. And most recently, our New Zealand CEO Craig Olsen was one of 60 corporate leaders to launch the Climate Leaders Coalition, to help New Zealand transition to a low carbon economy.
We have maintained our commitment to Group Carbon Neutrality since 2012, and will continue our commitment to resource use efficiency and reducing the emissions from our operations, where possible. IAG will also continue to incorporate environmental, social and governance (ESG) considerations into IAG’s Investment Policy and approach. Read our Public policy position on climate change (26.93 KB).
Our Climate Action Plan
Our Climate Action Plan builds on our proud history and sets out the actions we will take now, and into the future. Our plan embeds climate action as part of our strategy, and helps us understand the role we can all play to deliver on our commitments.
Underpinning our plan is the primary objective identified in the Paris Agreement to limit global climate change to two degrees of global warming above pre-industrial levels. We’ve also introduced science-based emission reduction targets, which will be achieved through a focus on reducing emissions from energy use and fleet.
In line with our regional leadership aspiration, next week we are excited to be partnering with NAB to host a two-day conference looking at how we finance a resilient and sustainable economy. The event will bring together delegates from the United Nations Environment Programme Finance Initiative, together with all levels of government, various community groups and business, with a view of developing a sustainable finance roadmap for our region.
Taking action on climate change
IAG is committed to understanding and disclosing climate risk and opportunities using the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD):
- Governance: Accountability and oversight for IAG’s Climate Action Plan, including our approach to disclosure, sits with the Board and the Group Leadership Team.
- Strategy: Our strategy is resilient to short term climate change risks due to our use of risk-based pricing, re-insurance and the ability to annually adjust premiums. We recognise there are medium and longer term strategic considerations from increasing frequency and severity of natural peril events and associated increases in claims costs. We have commenced transitional and physical risk assessments to further inform our organisational strategy and climate scenarios are being explored to inform how we improve short, medium and long-term business outcomes. We are also investigating further product and service opportunities that support adaptation and emission reductions, additionally to the existing fuel-efficient vehicle pricing benefit provided through our NRMA and NZI brands.
- Risk management: IAG considers climate-related risks through our Enterprise Risk Profile, with mitigating strategies for these risks supported by our Risk Management Framework and Risk Management Strategy. In the 2018 financial year, we commenced an assessment of physical and transitional risks. We’ve been working with leading climate researchers on potential trends and impacts of extreme weather events. The first phase has modelled different climate futures informing how much, and in what locations, extreme weather may impact claims events and ultimately home insurance cost. Our TCFD informed risk assessments, scenario analysis and disclosure will also be informed by our participation in a global pilot led by the UNEP FI Principles for Sustainable Insurance Metrics and targets: IAG has been climate neutral since 2012 and achieved our absolute carbon emissions reduction target of 10% ahead of our 2020 commitment. We have recently set science based emissions targets out to 2050 and these are included in our 2018 annual review.