Our approach to sustainability

As a global insurer and reinsurer, we are focused on the governance and sustainability of our business, on being a good employer and on making a positive contribution to the economies and communities in which we operate.

Managing risk is what we do at QBE. In an environment of rapid and ongoing change, it is important we understand current and emerging environmental, social and governance (ESG) trends that impact our stakeholders. This knowledge allows us to build sustainability considerations into our risk management and decision-making processes and to help our customers manage risk through our products and services. Taking a holistic, long-term view also enables us to continue creating value and ultimately protects our organisation’s sustainability.

This Report outlines our approach to being a responsible and sustainable business and highlights how we work with key stakeholders to strengthen our collective capability for identifying and addressing ESG risks and opportunities.

Governance and management

Four core groups are responsible for governing and managing our sustainability activities.

Governance and management
Board Risk and Capital Committee
(BRCC)

Oversees and guides QBE’s sustainability approach, initiatives and reporting requirements and receives regular updates on performance and activity.

Group Environment, Social and Governance (ESG) Committee

Executive committee reporting to the BRCC and responsible for the delivery and effectiveness of sustainability strategy, initiatives and reporting requirements. The ESG Committee is chaired by the Group Head of Communications and Marketing, a member of the Group Head Office executive team. It is made up of senior representatives from Group departments involved in the day-to-day management of sustainability issues, including Risk, Finance, Investments, Investor Relations, People, Communications, Legal, Company Secretariat and Compliance.

Group Sustainability function

Formed in 2017, under a dedicated Group Head of Sustainability, to support the work of the ESG Committee by providing greater coordination of external stakeholder engagement, sustainability strategy development, performance management and reporting.

Climate Change Working Group

Focuses on identifying and managing the physical and transitional risks related to climate change and the global shift towards a low-carbon economy. The Working Group includes senior representatives from across our business, including Underwriting, Investments, Finance, Risk and Operations.

QBE has other internal governance forums whose members have the specialist skills to understand and address new and existing sustainability issues. These include our Group Emerging Risk Forum, Group Underwriting Committee, Classification of Social Investments Committee and Diversity and Inclusion Council.

The QBE Foundation has separate governance arrangements which are outlined in the Community section of this Report.

Our focus areas

In early 2016, we worked with an external consultant to complete a materiality assessment for QBE. Following this work, the ESG Committee developed a Sustainability Framework that was approved by the Group Executive and Board. The Framework is structured around the following focus areas:

  1. Sustainable underwriting;
  2. Responsible investments;
  3. Operations;
  4. Environmental metrics;
  5. People and culture;
  6. Community;
  7. Governance and compliance.

This Report provides an overview of each focus area and highlights progress throughout the year.

In late 2017, we began updating our materiality assessment and taking a more detailed look at what we do, how we do it, and how we respond to ESG issues facing our business and customers across our regions.

The results of this assessment will guide our planning for 2018, which includes refreshing our Sustainability Framework, developing a new Sustainability Strategy and reviewing our sustainability performance management approach.

Stakeholder engagement

QBE operates in an increasingly complex and dynamic marketplace. As a global business with many diverse stakeholder groups, it is essential we work closely and transparently with them. This is the only way we can identify issues and opportunities and gain the insights we need to ensure our strategy, products and services continue to meet stakeholders’ needs.

Throughout the year, we engage in different ways with a range of stakeholder groups, including customers, investors, employees, commercial partners and community groups.

Major stakeholder groups and how we interact with them

Major stakeholder groups and how we interact with them
Customers

Direct customers
End customers

Direct customer engagement
Intermediaries
Customer surveys
Customer feedback channels
Marketing research and brand monitoring
Net Promoter Score
QBE website/marketing materials

Investors

Institutional investors
Retailer shareholders
Analysts

Investor reports
Investor presentations
Annual General Meeting
Direct engagement
Participation in surveys

Employees

Directors
Employees
Contractors

Employee engagement survey
Roadshows, meetings and events
Engagement platforms such as Yammer
QBE ethics hotline
Focus groups
Employee network and business resource groups

Industry, government and regulators

Prudential, conduct and other regulators
Government (local and national)
Industry associations

Regular meetings and briefings
Participation in supervisory activities including reviews and inspections
Participation in consultation processes
Round tables and focus groups
Industry forums

Commercial partners

Suppliers
Brokers
Agents
Fund managers
Financial institutions

Contracts/mandates (standards)
Ongoing relationship management
Industry surveys, forums and events
Supplier events
Feedback surveys

Society

Media
NGOs/charities
Sponsorship partners
Interest groups
Research and academia
Think tanks

Direct engagement
QBE Foundation (partnerships, donations, volunteering)
Sponsorships
Thought leadership
Panels and speaking events
QBE website
Briefings and press releases

We also stay abreast of emerging trends in sustainability and their potential impact on our business and stakeholders by inviting external speakers to QBE and attending external conferences and events.

Memberships

In line with our focus on stakeholder engagement, we are members of, or signatories to, several global and regional sustainability-related initiatives.

United Nations Environment Programme Finance Initiative (UNEP FI)
A global partnership between the United Nations Environment Programme (UNEP) and the financial sector. More than 200 institutions, including banks, insurers and investors, work with UNEP to bring about systemic change in finance to support a sustainable world.

UNEP FI Principles of Sustainable Insurance (PSI)
These provide a global framework for the insurance industry to address ESG risks and opportunities.

Principles for Responsible Investment (PRI)
The world’s leading proponent of responsible investment. Built around six principles for investing responsibly, the PRI is supported by the United Nations.

Carbon Disclosure Project (CDP)
A not-for-profit organisation that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.

ClimateWise Principles
ClimateWise supports the insurance industry to better communicate, disclose and respond to the risks and opportunities of climate change. Europe-based but representing a growing global network of leading insurance industry organisations.

Responsible Investment Association Australasia (RIAA)
The peak industry body representing responsible and ethical investors across Australia and New Zealand. RIAA works to promote a more responsible approach to investment by encouraging more people to actively choose a responsible and ethical option for their savings and investments.

Women’s Empowerment Principles (WEPs)
These principles for business offer guidance on how to empower women in the workplace, marketplace and community. They are the result of a collaboration between the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) and the United Nations Global Compact.

We also belong to industry bodies and other local membership organisations in regions and countries where we operate, and forums and institutes related to risk management, accounting and finance and actuarial services. We encourage employees to be involved in these organisations through training and qualifications, events, participation in working groups and taking leadership positions.

External memberships and reporting 1

External memberships and reporting External memberships and reporting
  1. FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that QBE Insurance Group Limited has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.

Performance and reporting

By engaging with stakeholders and reporting on our sustainability approach and initiatives, we aim to be transparent and open about our journey, achievements and performance. We are therefore involved in several external reporting and benchmarking initiatives.

Since 2016, QBE has been selected as an index component of the Dow Jones Sustainability Indices (DJSI) in recognition of our corporate sustainability leadership in the insurance industry. We are also a constituent of the FTSE4Good Index Series and participate in other surveys coordinated by ESG research groups, including MSCI ESG Research and Sustainalytics.

We were included as a member of the 2018 Bloomberg Gender-Equality Index (GEI). And, as a signatory of the CDP, we participate in its annual reporting requirements.

To make our external reporting more rigorous, we have engaged Deloitte to conduct independent limited assurance of our greenhouse gas emissions reporting. The limited assurance statement is available at the end of this Report. As we continue to review and develop our Sustainability Strategy, we will extend the scope of assurance across a broader range of sustainability metrics.

Leading the way in social bond issuance

QBE broke new ground in 2017 by giving debt investors the opportunity to make a positive impact on society and the environment.

QBE Green Bond

QBE Green Bond


In April, we issued $300 million in fixed-rate senior notes under a new QBE Green Bond Framework – the first green bond to be issued by a global insurance company. The proceeds were materially invested in areas such as renewable energy, low-carbon transportation, sustainable forestry, water efficiency, waste management and pollution control.

The QBE Green Bonds were popular with investors, who were keen to see more debt products with a social benefit.

QBE Gender Equality Bond

QBE Gender Equality Bond


In 2017, we also investigated how we could introduce a new debt product that incorporates gender equality, a strategic focus area for us. We signed up to the Women’s Empowerment Principles (WEPs) and established a new QBE Gender Equality Bond Framework, which imposes tight criteria for how we can invest any capital raised. An issuer must be a signatory to the WEPs and included in the Equileap Gender Equality Report Top 200 Companies for 2017.

In November, we launched the world’s first Gender Equality Additional Tier 1 bond transaction, raising $400 million. The market response was overwhelming, with investors commending our goals and highlighting how they resonated with their internal corporate principles. We received $9.5 billion of orders, meaning the book was 24 times covered.