DEFA14A: Chubb Urges Shareholders to Reject Scope 3 Emissions Reporting Proposal at 2025 Annual Meeting

Chubb Limited is recommending that shareholders vote against a proposal requiring Scope 3 greenhouse gas emissions reporting at the upcoming 2025 Annual General Meeting.

Summary

• Chubb Limited has issued a supplement to its proxy statement, urging shareholders to vote against Agenda Item 13, a shareholder proposal on Scope 3 greenhouse gas emissions reporting.
• The company believes that its current climate strategy, which focuses on working with insureds to reduce GHG emissions, is more effective than estimating emissions from millions of customers.
• Chubb argues that Scope 3 emissions disclosure would not provide useful information and would waste resources.
• The company highlights its comprehensive climate change strategy, including Chubb Climate+, Chubb Resilience Services, and technical underwriting criteria.
• Chubb also claims that its existing climate strategy and reporting meet investor expectations, based on discussions during their 2024-2025 shareholder engagement program.
• The company is actively monitoring new approaches to climate disclosures and regulatory obligations, but notes that current regulations do not require Scope 3 reporting.
• Chubb's Board and management have thoughtfully considered and chosen not to make the Scope 3 emissions disclosures requested by the Proponent at this time.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While Chubb is pushing back against Scope 3 emissions reporting, they are highlighting their existing climate strategy and engagement with shareholders. The document presents a confident defense of their current approach.

Positives

• Chubb has a comprehensive climate change strategy focused on working with insureds to reduce GHG emissions.
• The company has implemented Chubb Climate+, Chubb Resilience Services, and technical underwriting criteria.
• Chubb actively engages with shareholders on climate-related initiatives and disclosures.
• Chubb is monitoring new approaches to climate disclosures and regulatory obligations.
• Chubb's existing climate strategy and reporting meet investor expectations.

Negatives

• Chubb believes Scope 3 emissions disclosure would not provide useful information and would waste resources.
• The company argues that current Scope 3 emissions estimates combine inaccurate and insufficient data with a flawed methodology.
• A shareholder proposal on Scope 3 emissions reporting received only 28% support at last year's annual general meeting.
• The Proponent Notice omits a statement that Green Century Equity Fund owns no more than $5 million of Chubb shares, as required by the proxy rules.
• Chubb believes that Green Century did not mail or otherwise disseminate the Proponent Notice to Chubbs shareholders, as required by the proxy rules.

Risks

• There is a risk of reputational damage if Chubb does not meet investor expectations regarding climate change disclosures.
• Regulatory requirements for climate disclosures may change in the future, potentially requiring Scope 3 reporting.
• The company faces the risk of physical and transition risks associated with climate change.
• There is a risk that Chubb's climate strategy may not be effective in reducing GHG emissions.

Future Outlook

Chubb will continue to advance in encouraging the transition to a low-carbon future while recognizing the ongoing energy needs of the global economy.

Management Comments

• Our approach, which is science-based and fact-driven, is far more effective at influencing the actions of our insureds than attempting to estimate the emissions of our millions of commercial and individual customers and attributing emissions to Chubb.
• Ultimately, Scope 3 emissions disclosure relating to our underwriting, insuring and investment activities serves no useful purpose and wastes Chubbs and our shareholders resources.

Industry Context

The document reflects the ongoing debate and varying approaches within the insurance industry regarding climate change and emissions reporting, particularly Scope 3 emissions. Some investors are pushing for greater transparency, while companies like Chubb are arguing for alternative strategies they believe are more effective.

Comparison to Industry Standards

• Many European insurers are further ahead in their climate reporting due to regulations like CSRD, which, while not mandating Scope 3 reporting, requires a dual materiality assessment.
• Companies like Allianz and AXA have already begun disclosing some aspects of their Scope 3 emissions, particularly those related to their investment portfolios.
• Chubb's approach of focusing on working with insureds to reduce emissions is similar to strategies employed by other insurers, but the level of detail and commitment to Scope 3 reporting varies significantly across the industry.

Stakeholder Impact

• Shareholders: The outcome of the vote on Agenda Item 13 will impact shareholders' ability to assess Chubb's climate-related risks and opportunities.
• Clients: Chubb's climate strategy and underwriting criteria will impact clients in high-emitting industries.
• Employees: Chubb's commitment to climate change may impact employee morale and recruitment.
• Regulators: Chubb's approach to climate disclosures may be subject to regulatory scrutiny.

Next Steps

• Shareholders will vote on Agenda Item 13, the shareholder proposal on Scope 3 greenhouse gas emissions reporting, at the Annual General Meeting on May 15, 2025.
• Chubb will continue to implement its climate strategy and monitor new approaches to climate disclosures and regulatory obligations.

Key Dates

Keywords

Scope 3 emissions, climate change, GHG emissions, proxy statement, shareholder proposal, Chubb, climate strategy, reporting, disclosure, investors